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Loans for Life: Prioritizing Continuous Loan Service

The case for offering online consumer loan modifications.

By Michael Ball | Updated on June 26, 2016

CU Times recently reported that credit unions currently finance one in every four vehicles sold. According to CU Direct Market Research Analyst Jose Torres, new car sales are expected to reach 17.7 million in 2017, a 3.3% increase over last year. As the competition for members’ auto and personal loan business rises, credit unions should further evaluate how they measure their consumer lending success. The time when success was measured solely by loan volume growth is over. Now, credit unions should ask: Are loans retained for the life of the loan? Are portfolios strong? And, most importantly, are members financially secure in their loan commitments?

When a loan is originated, it is just that: The origin. This beginning stage sets the tone for the entire loan experience. Credit unions should view the loans they originate in the same manner. They can identify ways to check in with members to determine the impact the loan has on their lives, and assess whether personal or financial circumstances have changed since the loan was originated. This is what modern day members have come to expect from a trusted financial institution partner – something that also plays a role in long-term loan retention. Credit unions should ensure their members understand that if the terms of the loan that once worked now pose a financial challenge, they can and should be having a discussion with a credit union representative to address the issue.

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