Online retailer Kogan is branching out into home loans and it actually makes a lot of sense
Kogan Money will offer regular and bad credit home loans to its 1,000,000+ customer base.
Kogan is famous for selling cheap electronics, but they also offer insurance policies, Internet plans and soon mortgages.
Kogan will handle the marketing and customer acquisition, taking advantage of an active customer base of well over a million people.
Through Kogan, Adelaide Bank will provide the standard or "prime" home loans (traditional mortgages that suit most borrowers) while Pepper Home Loans, a specialist lender, will handle mortgages for credit impaired borrowers.
What makes this such an interesting partnership?
Expanding into mortgages might seem like a strange leap for an electronics retailer, but the company already offers insurance policies, travel deals and Internet plans.
No doubt Kogan is planning to take full advantage of its large and growing customer base (according to its 2017 financial report, the company's customer base grew by 36% last year) and its experience in customer service.
If you've already got a customer signed up for a mobile and Internet plan, you have a lot of information about them. And they have to deal with you anyway.
Offering an easy, competitive home loan isn't that much of a stretch, especially if you can serve all types of borrowers (there aren't that many lenders offering bad credit home loans).
As long as the products on offer are both competitive and easy to apply for, Kogan could carve out a real place for itself in the crowded mortgage landscape.
- Not now: Just 35% think it’s a good time to buy property
- The key to investing in property during lockdown
- Home stretch: 1 in 3 Aussies would move if they could work from anywhere
- How much less can you borrow under new APRA home loan rules?
- RBA Survey: Half of experts say Big Four will raise rates out of cycle, cash rate holds