Consumer-friendly products, such as the Aura loans, can provide the opportunity to build credit and improve financial capability.
Founded in 2012 and headquartered in San Francisco, Aura Financial LLC (Aura) provides access to credit to individuals underserved by traditional financing sources. Aura uses technology to power lending at 1,200 locations across 100 businesses throughout California, Texas, Illinois and Arizona.
Aura, formerly known as Insikt, was certified by the U.S. Treasury Department in April 2018 as a Community Development Financial Institution (CDFI). CDFI’s are mission-driven financial institutions that are dedicated to providing financial services to meet the needs of economically disadvantaged individuals within underserved communities.
In order to become a certified CDFI, the financial institution must:
- Have a primary mission of promoting community development;
- Provide financial products and services;
- Serve one or more defined low-income target markets;
- Maintain accountability to the community it serves;
- And be a legal non-governmental entity.
In recognition of Aura’s product and mission to improve the lives and financial health of low-income households, Aura has received this certification.
Community Capital Management (CCM) and its CRA Qualified Investment Fund (CRANX) invested in the Aura Financial LLC, Series 2019-3 notes represent 14,514 customer-friendly small consumer loans to borrowers with limited or no credit history.
Consumer-friendly products, such as the Aura loans, can provide the opportunity to build credit and improve financial capability. Sixty-five percent (65%) of the loans were made to borrowers in California with an average borrower income of $37,250 or 45.3% of the statewide area median income; 25% of the loans were made to borrowers in Texas with an average borrower income of $33,527 or 47.1% of the statewide area median income; 7% of the loans were made to borrowers in Illinois with an average borrower income of $31,240 or 38.2% of the statewide area median income; and 3% of the loans were made to borrowers in Arizona with an average borrower income of $33,663 or 49.6% of the statewide area median income.
Since 2014, Aura has helped over 350,000 customers saving over $308 million in potential fees by borrowing money from the company instead of choosing other alternatives typically available to people with limited credit history. In addition to offering loans at affordable rates, Aura helps customers build and repair their credit scores and creates a path to the financial mainstream. Even for borrowers with no credit history, after three successful loans a customer can build to a FICO score of 660. Additionally, 67% of customers with two loans increase their credit score by 312 points and 78% of customers with three loans increase their credit score by 410 points
The average Aura customer has an annual gross income of $34,300 and 34% of customers have no credit score. Twenty percent of customers are unbanked. The average FICO credit score for scorable customers is 627. The median age is 40 and 91% of customers rent their homes. The top reason customers obtain a loan with Aura is to build a credit history (39% of loans), followed by the necessity of paying bills (24%) and to purchase or repair a car (13%).
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