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September 3, 2020

SoLo Funds vs Payday Loans: 4 Reasons SoLo is Better

Let’s face it — no one likes taking out a loan. It’s often a stressful experience, and it can be an expensive one too. SoLo’s mission is to empower underbanked individuals that are at an economic disadvantage due to the established norms of the finance industry by offering affordable options for short-term loans that have never been available before. SoLo does this by pairing borrowers on the app with lenders who want to use their discretionary capital to help those in need while making a reasonable return on their money. Read on to find out how SoLo is disrupting the payday lending industry through a more modern, more convenient, more socially responsible lending service.


Historically, payday lenders have offered one service undeniably well — speed. If you need an injection of money fast, they can come through for you same-day. Banks and other traditional financial institutions have struggled to deliver with the swiftness that emergency situations call for, and unfortunately, payday lenders have taken advantage of their stranglehold on the small-loans market by charging exorbitant interest rates. Fortunately, new technologies in the mobile-first era have finally come along to challenge both the speed, convenience, and price of payday loans. With SoLo Funds, you can sign up for free and start requesting loans immediately after completing your borrower profile. Once your loan is accepted by a lender (and confirmed by you), the money will be instantly transferred to your account. SoLo’s iOS app also makes it easy for you to do all of this from your home, workplace, or wherever else you may be when your need for funds arises.


Anyone that’s dealt with payday loans before knows that they are often designed to make the most money possible off of borrowers rather than helping them improve their financial situation. The peer-to-peer (P2P) system of lending and borrowing that’s used in the SoLo Marketplace is much more sensitive to making healthy financial choices that won’t hurt borrowers in the long run. Borrowers are the ones that propose the terms for their loan, with interest rates (Lender Tips) capped at 10%. Lenders can select the loans that they feel comfortable funding based on a variety of factors, such as the length of the loan, borrower transaction history, and rate of return. In this way, everyone can benefit from the short-term loan. On SoLo, the goal is for borrowers to regain financial stability after their loan has been paid off, rather than trying to trick them into additional fees or charging exploitative interest rates, as payday lenders have become notorious for doing. As the old adage goes, “a rising tide lifts all boats.”


Banks have become stuck in their ways and unable to adapt to the rapid changes that are taking place in the Internet Age when evaluating the creditworthiness of loan applicants. Too many segments of the population — the underbanked demographic and Millennials, to name a few — should not have their access to capital stifled simply because they don’t mirror the behaviors of previous generations and meet the archaic metrics that the financial industry still uses to evaluate credit today. For this reason, SoLo does not require a minimum credit score for users to sign up. It’s also why we give borrowers the ability to customize their loan terms, since everyone’s needs are different. With something as important as personal finance, people need multiple options to ensure they’re making forward progress towards their saving goals and debt management.


SoLo is a technology-driven finance company that’s leading the way in P2P lending for loans of up to $1,000. We discussed above how limiting a credit score can be to a family or individual, so we’ve created our own smart-data evaluation metric (called the SoLo Score) to fill this role. Creditworthiness can be determined using a variety of different sources, in real-time, providing a fairer picture of a user’s financial health. Lenders can use this score to create a risk profile for the loan that they’re considering funding. We’ve also made a variety of new updates to the Marketplace in the year since we’ve launched that were direct responses to requests from our users. We’ll continue to listen to user feedback in the future, and add features that create a more pleasant experience for both lenders and borrowers as SoLo continues to grow.

You can download SoLo Funds for free and start making a difference — in your life or someone else’s — today.