Online student loan refinancing platform LendKey has secured up to $1 billion in financing from specialty finance firm MidCap Financial in a deal they claim is largest ever institutional financing commitment to an online student loan refinancing platform. MidCap will purchase as much as $1 billion in student consolidation loans originating on LendKey and may facilitate additional purchases through parent company Apollo Global Management, an alternative investment manager.
The infusion allows LendKey and its lender clients to expand their student loan refinancing programs while also offering more options for liquidity and capital management.
“This transaction is a transformational event for the online lending industry,” said LendKey CEO Vince Passione. “This commitment serves as a testament to LendKey’s success in building a valuable student loan portfolio for our current customers and a validation of the ability of online lending platforms to directly originate high quality loans.”
In its release LendKey said the average student loan debt sits at a record $33,000 with interest rates north of seven percent. More than 300 credit unions, community banks and other institutions use the platform.