7 ways to help increase loans

Remember when lending used to be easy?  Members would dress in their Sunday best, come into the branch to make a good impression, and practically beg you for a loan? Yeah, we don’t remember that either. But lending has evolved drastically in the last few years.  The days of in-person apps are going away.

Today, when members ask you for money, they’re quite often in their jammies, not their Sunday best. It’s all about convenience and speed, and members accessing your services on their time! Sure members might come into your branch to apply for a loan, but they’re more likely to use the following:

• Call Center
• Online  (24/7)
• Mobile (24/7)
• Tablet   (24/7) 

At the heart of the appeal of all these channels is the member’s desire for a quick response and immediacy: instant decisions, e-signature capability, and a fast turn-around (closing a loan in minutes rather than in days). So, if this is today’s playing field, here are a few options to explore that can help you increase loans and stay in the game:

1. Go Mobile for Loans

• Go out to your SEG groups or a partner dealer.
• Enable members to open new accounts remotely.
• Take loan applications remotely and provide an instant decision.
• With an iPad, the member can sign their documents with their finger!

2. Use Social Media to Get the Word Out!

• Market your products and services letting your members know you have what they need.
• Create contests and have fun!

3. Educate your Members

Before your members decide to purchase a car, they do some research.

• Be relevant during the research process by providing them the tools and the tips they are looking for.
• Educate them on what they need to know before they buy a car so they can get the best deal.
• Pre-qualifying saves time and hassle at the dealership.
• 0% financing by the dealer vs. CU financing.
• Add-on fees/products – cost more at the dealers.

4. Loan Ideas

• Offer a payday loan alternative.
• Create a program for subprime borrowers.
• 90 days no interest loans.
• Consider extending new car loans out to 84 months. (Almost 25% of new cars financed in Q1 of 2014 were extended for 7 years.)

5. Auto Loan Recapture

• Identify members who have auto loans elsewhere and who could save a min of $XX by refinancing.
• Make a personal, specific offer and quote:
• Rate
• Monthly payments
• Annual savings (“Here is exactly how much we can save you in a year.”)

6. Expand Indirect Opportunities

• Market to members according to life milestones to get CU loans from retail financing … aka Lifestyle Lending.
• Create new indirect relationships with local businesses such as:
• Dentists
• Furniture/Appliance stores
• Veterinarians
• Plastic Surgeons
• Provide them with quick responses and competitive rates.
• Everyone wins!

7. Target Gen Y Early

• Help them establish credit with a small loan, no application fee, a competitive rate, and a one-year repayment term.
• This will:
• Establish a relationship with that borrower,
• Give the CU an opportunity to interact and educate them
• Help build credit.

With so many lenders vying for the same share of mind and wallet, if you really want to connect with members you need to get creative with your loan strategies. 

Loan applicants? They’re out there. Sitting at the breakfast table in their bunny slippers with their smartphone in hand with no plan to visit your branch. You need to be the solution at their fingertips.

Yvonne Sambrano

Sr. Lending Product Manager

EPL, Inc.

Mobile Lending: An Extension of the Internet Channel

Consider the impact, that mobile banking will have on something as basic as Internet loan applications. Consumers prefer experiences that are optimized to their smartphones, as indicated by the fact that 24% of online applications come from mobile devices (smartphone or tablet) for credit unions with a mobile presence. According to a CUNA Mutual Group white paper, 90% of credit unions have an Internet loan application. You have to assume that these are inevitably being accessed by mobile devices with a screen about one-tenth the size of a desktop/laptop. Have you considered the user experience of your members? Is your website mobile-optimized? It’s all about content and usability!

According to Google, if your website is not mobile-optimized…

•       48% of customers will believe you don’t care about them

•       40% will go to your competitor’s website, and

•       1 in 6 will switch to another financial institution

Credit unions must meet customers where they are, through optimized channels they need and increasingly demand. This is the marketplace today; location is no longer about being at a major intersection or near the newest mall.  It means being available 24/7 and ensuring your services are both optimized and maximized for mobile access.

Non-optimized vs. optimized loan applications

Optimize your mobile access for all phones and tablets. This includes ensuring website links are easy to locate and use. Now, whether your site is optimized or not, Internet lending applications are being attempted on smartphones and tablets. Offering member-focused benefits like mobile alerts and iPad and mobile-phone-specific apps also has strong Gen Y appeal.  Alerts can also be set to notify customers of a low balance, new loan rate changes, and other features.

Other opportunities To Grow Loans Via Mobile

Social Media.

A primary means to engage Gen Y, or Millennials, is through social media.  And many credit unions have begun targeting new members through social media. There’s an opportunity to grow social media efforts that will drive sales because social media users are very likely to conduct financial transactions via smartphones.  In fact, 65% of U.S. smartphone owners use push notifications for social alerts. Social Media is also a tremendous way to engage customers and learn both their needs and their feelings toward your products and services.  In this way it is more than just a marketing tool.

Auto Loans

Did you know that 31% of consumers use smartphones during the car-buying process?  Members are using their smartphones to research the car they want to buy.  With a mobile loan application, you will enable them to continue the auto buying process to obtain the loan – possibly while they are still on the lot.  With a mobile loan application, members can apply for loans anywhere, anytime and on any device.   

The "Smart" credit unions will think about the member's smartphones at every touchpoint.  Its the member's preferred means of information gathering and their lifeline to the rest of the world - and you're products.

Yvonne Sambrano

Sr. Lending Product Manager

EPL, Inc