Interested borrowers select the Switch Lenders Now button, download their actual loan info through account aggregation technology (the demo showed Intuit powering an account scrape of Sallie Mae), complete a short loan, and upload a scan of their drivers license and last pay stub.

That info is sent off to student lenders who make actual credit offers to the user within two to three days (see screenshot #2).

In the demo, using an actual student from their beta launch, the three competing lenders shown were (may not be real quotes however):

As proven by the success of Sofi ($400 million funded) and the buzz around Finovate alum , the student loan market is ripe for new thinking (I won’t say disruption, because debt consolidation is hardly a new concept)

• Wells Fargo at 3.75%
• SoFI at 5.88%
• CU Student Loans at 4.90%

As proven by the success of Sofi ($400 million funded) and the buzz around Finovate alum , the student loan market is ripe for new thinking (I won’t say disruption, because debt consolidation is hardly payday loans advance South Carolina a new concept)

• San Francisco-based startup launched in
• Raised $500,000
• 30,000 borrowers registered during its beta test (carried out under previous incarnation, JoinStampede)
• Founder Stephen Dash worked at JP Morgan Chase
• Its goal is to move beyond student loans into every bank and insurance service.

That said, existing financial institutions can play in this game, and win if they want to. We believe customers would be more likely to refi if it was delivered by their primary financial institution within the secure online (or mobile) environment.

And the great thing about saving your up-and-coming customers a few grand each year is that they are hardly going to jump ship to save $5 per month on a checking account.

This time of year I’m always on the lookout for financial companies doing something interesting for the holidays. Gift cards are the obvious opportunity, but there are other financial products that make good holiday gifts as well (stocks, mutual funds, savings bonds, and so on).

But it took a startup, Finovate alum (see FinovateFall 12 demo), to come up with one of the most valuable gifts yet: student loan repayment.

It’s not as exciting as $100 to blow at Nordstrom (note 1), but the long-term value is pretty enticing, especially if the former student gets a number of them over the years. And it’s the perfect gift from grandparents or aunt/uncle who probably don’t have a clue what gift card to choose anyway.

1. The giver completes a simple form naming the recipient, amount (from $5 to $500), date of delivery (email) and custom message (see screenshot #3).

C. There is a 6.5% transaction fee (3% for the card processer and 3.5% for ). Like those pesky shipping charges on ecommerce sites, the amount is not revealed until the final confirmation screen (screenshot #5)

D. If the recipient does not redeem before the expiration date, the money goes back to the giver, less the transaction fee.

This has great potential for banks. A simple form to deposit cash or pay down bank loans/cards is a welcome service for holiday, birthday and graduations. The is nearly a perfect example of how to build one. The only serious weakness is lack of disclosure of the 6.5% transaction fee until the last screen. While $ to send a $300 repayment is not outlandish, it leaves a slightly bad taste when disclosed so late in the process. Why not be upfront with it? It would just add to the credibility of what the startup is doing.

Launching: SmarterBank, a Virtual Bank Aimed at Student Loan Holders

Startups are advised to find pain-points, then build businesses to profitably solve them. Despite the current wave of very bad publicity around banks, especially the big ones, everyday banking isn’t a huge pain-point for the 80% of households currently served by existing players.