Australians will benefit from a helping hand in tackling the $2 trillion household debt burden, with Symple Loans planning the development of a new digital tool to make it easier for consumers to pay down their high interest rate loans.
A first-of-its-kind capability in the Australian market, Symple has begun engineering an algorithmic debt repayment solution that uses mathematical economics and game theory principles to generate a bespoke loan repayment plan based on a customer’s individual circumstances.
Symple’s internal modelling estimates that by using the tool, Australians could collectively save more than $1 billion in fees and interest charges annually.
Bob Belan, Symple’s CEO & Co-Founder, said the company was motivated to tackle what it sees as unsustainably high levels of debt among Australian households, with over $60 billion in personal loan and credit card balances at an average interest rate above 15 per cent.
“The statistics on this issue are quite clear,” said Belan. “Australian household debt levels are at their peak while savings ratios are at their lowest levels since 2002. Despite historically low interest rates, household disposable income has only increased by 1 per cent which is a function of persistently low wage growth relative to the 1.8 per cent rate of inflation. All of this will eventually make it increasingly difficult for Australian consumers to service existing loan obligations.”
Internally referred to as ‘The Neumann Project’, Symple will rely on Australia’s open banking regime to access and analyse an individual’s debts across multiple lenders, generate a bespoke repayment strategy, and then automate the loan repayment process. Symple can also offer qualifying customers who use the tool a new, lower interest rate loan specifically for the purpose of repaying higher interest rate loans held with other banks.
Symple officially opened its loan book in January 2019 to address what it saw as unnecessarily high interest rates being paid by credit-worthy Australian consumers. Belan said the company’s promise of better, faster, easier and more affordable personal loans has generated strong demand among credit worthy customers seeking lower cost alternative lending solutions.
“Even with our conservative approach to credit risk management, Symple’s early ramp up has outpaced its marketplace lending peers. We are quickly approaching $5 million in loans originated with a target of $50 million within the next 12 months. About 70 per cent of Symple’s loans have been approved at interest rates below what is being offered by the traditional lenders in the market.”
“At Symple, we believe we have an opportunity to improve the financial health of Australian consumers. We began that journey by launching our digital personal loan product a few months ago and now intend to take further steps to help Australians decrease their high interest debt obligations in a more optimal way,” Belan said.