Wharton FinTech Podcast
00:34:20 · Matt Palese
[00:34:20] S1: Yeah, no, absolutely. I love this question and I'm excited about a lot of different things. The one thing I would say here is when you look back on Earnest's history, we spent over a decade building, I would say, something that is incredibly hard to build in this industry. It's a brand that borrowers actually trust. It's a product that consistently delivers. We have a phenomenal team that really cares about customer outcomes. And so for me, the foundation is there. And really the way I think about the next twelve to twenty four months is building on top of that, right? And so on the product side, what that means is the expansion into personal loans. That is still very much in the early stages, but we have a ton of runway ahead of us. We're serving people who are navigating high interest debt or who might be sort of contemplating a major financial milestone. And the exact same approach that made us successful in student lending also applies to personal loans. And so, you know, we're also in a unique moment where, you know, there's just millions of borrowers that are actively reevaluating their options, and they're doing that without a clear picture or a full picture. And so, as I mentioned earlier, our focus is to simply keep building features that really solve each customer's pain point, which could be unique and different, and making sure that we can be flexible in that way. And so, you know, one of the things that we've just done recently was launched a new feature called the job offer refinancing. And so what it does is allow graduate borrowers to refinance using a signed job offer letter before they even graduate. And so the benefit there is that they can lock in a better and hopefully a lower rate much earlier without losing their grace period. And so ultimately what that means is that you can start saving sooner, right? Because that interest during your grace period continues to accrue, but if you can accrue less interest and you have a job offer lined up, then Earnest will take that into consideration and allow you to refinance earlier versus making you wait until you actually graduate and go into repayment. And so, you know, at the end of the day, we just want the company to show up for the people when it matters. I think that means giving them clear, honest answers and again, real human support.
00:36:44 · Matt Palese, Vaibhav
That's what we're going to keep building towards. [00:36:48] S0: The job offer feature is quite interesting. I can see how that can give someone almost like six months to an year of headway in terms of the savings they can make. And finally, a word of advice from you. What would you say Wharton or other graduate students, many of whom are in their early careers or still paying loans, actually should do right now? Is there any one thing that matters from a financial planning or a wealth management perspective?
00:37:16 · Matt Palese
[00:37:16] S1: Yeah, I think that goes back to where, you know, why do we think people choose not to refinance today? Or why do we think that 10% is so low? You know, part of the problem being just inertia and inaction. I think the advice I would give is to develop a plan, right? The sooner you act, the quicker you can actually start to realize the full return on your investment, which in this case is your education. And so acting fast and quick is the most important thing. I think second, be strategic about your choices. Not every loan is created equal, so it doesn't have to be an all or nothing decision. Sometimes it only makes sense to refinance a portion of your loans while leaving the rest alone, right? That sometimes can complicate the decision. But if the objective is to get out of debt faster or reduce your monthly payment, And as a borrower, you have multiple loans that were taken out over multiple academic years. Those loans likely have different interest rates, right? And so it may not necessarily make sense to refinance all of those loans, but some of those loans, it might make more sense. And so just be strategic when you do act, because I do think there's options that are out there where you don't have to kind of make this an all or nothing decision. I think the last thing I'll say is be thoughtful about what you do with your savings, right? And so if the objective is to pay less over the life of your loan, and so therefore you have more excess cash flow, you know, think about how you should start allocating that free cash flow that you've freed up effectively into a potential brokerage account or a savings account that can compound over time and ultimately build into much more meaningful wealth. I think the thing that I'm incredibly thankful for in my own life is growing up is really being disciplined very early on about spending less than I make, thinking long term and really valuing the benefits of compounding. So it didn't feel like I was making a lot of progress over the years when I was just taking the $100 or $200 or $300 whatever it may be, and stashing it in a brokerage or savings account. But you fast forward ten, twenty, thirty years later, you really start to see the value of compounding.
00:39:55 · Matt Palese, Vaibhav
And so the faster you can think about, one, acting, and then two, being strategic about how you make those decisions, and then thoughtful about how you take advantage of those excess savings, I think could be extremely impactful longer term. [00:40:12] S0: Yeah, that's great advice. On the final note, what's the best way for someone to reach out to you? Is it LinkedIn or otherwise? [00:40:20] S1: Yeah. So I'm in LinkedIn. You can you can find me on LinkedIn. It's Matt Palese, p a l e s e, or you can shoot shoot me an email. It's, matt, matt.palese,palese,@Earnest.com. [00:40:33] S0: All right. Great. Thank you so much, Matt. This has been an incredibly insightful conversation and really appreciate you spending time with us today. [00:40:40] S1: Yeah. Thank you so much. Thanks for having me. I really appreciate it. [00:40:44] S0: Thanks it.