Boro, a mobile financing app that helps college students secure loans, announced Tuesday it closed on the second half of a $12 million Series A round, earning them an additional $6 million to funding raised last June.
The student loan debt in the United States is about $1.6 trillion. However, college students today have financial struggles that go beyond student debt. The rising cost of everything from textbooks and rent to the tuition itself can leave some students struggling just to pay the bills. Without credit histories, many students have a hard time getting approved for safe and affordable loans to help them get by.
Boro was created to solve that problem by offering microloans to college students looking to build their credit.
The company claims that the majority of its customers have no previous credit history at all. Boro assesses applicants based on “non-traditional” data sources like educational background, utility bills and bank transactions instead of metrics like FICO scores and income.
Once an applicant is approved, Boro says funds will appear in their account in a couple of days. Unlike traditional loans where borrowers make minimum payments each month, the company establishes fixed term limits where borrowers fully pay off their loans on a controlled schedule, reducing the risk of racking up debt. The company offers credit-building products like BoroCash and BoroDrive, along with educational blogs and quizzes, to help students build a healthy credit history and stay financially informed.
“Our goal is to create meaningful opportunities for students to build healthy borrowing habits that will serve them well beyond their time in college,” co-founder and CEO Hao Liu said in a statement. “Students today are overserved by unethical lenders. Boro breaks that pattern by helping users get access to stress-free financing that helps them grow their financial confidence and protects them from high-interest rates and hidden fees.”
Boro is headquartered in Chicago and claims its products are available in more than 200 colleges and universities across the country.
This most recent funding round was led by Chinese fintech company LexinFintech. Boro says it will be using the capital to expand its presence in the U.S. and leverage LexinFintech’s expertise to serve “underbanked Generation-Z users in China.”
