Credit union software for auto loans fuels growth


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The year 2020 was challenging for nearly every industry, and the automotive industry was no exception. Disrupted supply chains, assembly line shutdowns, remote/online vehicle sales, and layoffs stressed most segments of the industry. Yet, some segments of the industry managed to thrive. Consumers with exceptional financial standing in search of high-performance, luxury, or classic vehicles seemed to be immune to the uncertainties that most consumers experienced. Some auto lenders who focused on high-net-worth consumers also fared well.

Technology Is a Critical Contributor to Lending Success

It wasn’t just a matter of market focus; these lenders also relied on lending technology and solutions that provided a competitive edge. Specifically, the ability to streamline the loan application process, quickly respond to loan requests with risk-adjusted offers, and continually analyze the efficiency of their lending processes and portfolio performance was the differentiating factor.

One case, in particular, involves an auto lender that specializes in financing classic and high-performance vehicles. They offer both direct and indirect car loans with the goal of keeping payments low. Unlike traditional auto lenders, they can offer significantly longer terms, some exceeding 10 or more years. Their business model is unique and proven to address the interests of the market segment they focus on.

How defi SOLUTIONS Addressed Lender Requirements

In 2017, looking for significantly greater efficiency in handling a growing number of direct and indirect loans, the aforementioned lender invested in defi SOLUTIONS software for loan originations. They chose defi SOLUTIONS for the following key factors: 

  • A cloud-based platform
  • Menu-based configuration capabilities 
  • Wide range of pre-integrated information sources and services that can be customized to the lender’s requirements 

Specific software products implemented include:

defi CONNECT ORIGINATIONS present borrowers with available financing programs and rates in real-time via desktop or mobile devices. All borrower information, including any supporting documents, is submitted digitally. Automation and integrated fraud management capabilities ensure applicants are providing verifiable information.

defi CONNECT DEALER is a self-service portal that provides secure access to real rates and programs customized for each dealer the lender works with. Dealers can easily shop rates and programs or quickly restructure existing deals. On behalf of the borrower, a dealer digitally submits all borrower information, including any supporting documents.   

defi LOS is a fully configurable loan origination solution that automates the application review, loan decisioning, and creation of offers. Decision rules, workflows, auto-structuring, and numerous pre-integrated lending information sources and services enable lenders to provide an entirely digital loan origination experience and quickly respond to lending opportunities with risk-based loan offers. In the best of cases, defi LOS enables lenders to respond to loan applications in seconds.

E-signatures eliminate delays and costs associated with sending and signing paper contracts. E-signatures are a critical capability in helping dealers close deals with highly motivated borrowers. 

defi ANALYTICS provides fully configurable dashboards and out-of-the-box reports that identify areas of lending process inefficiency using quantifiable metrics. Lenders can compare performance metrics week to week, month to month, quarter to quarter, or year over year. Regular analyses of metrics provide insight into past credit policies and their effect on current portfolio performance.

Benefits of Implementing defi SOLUTIONS for Loan Originations

As a result of implementing defi SOLUTIONS software, this lender realized an immediate increase in the number of loan applications submitted via mobile devices. The “anytime, anywhere” capability enabled by mobile loan submissions engaged borrowers when they were highly motivated to find financing and move forward with a vehicle purchase. defi CONNECT DEALER allowed them to establish better dealer relationships and generate more indirect lending opportunities by offering programs and rates customized for each dealer. 

They realized steady improvements in their ability to handle greater volumes of loan applications, and more importantly, capture more lending opportunities by responding rapidly to loan applications. December 2020 was the most successful month of the year and in 2021, volumes continue to improve with well over $35 million in originations booked in April. 

Analytics allows the lender to carefully monitor trends, which currently indicate that approximately 75% of loan applications are direct and 25% indirect. However, indirect loans comprise a significantly larger portion of their portfolio because of the higher-valued vehicles sold by dealerships. 

defi SOLUTIONS’ software has enabled the lender to meet the expectations of today’s high-wealth borrowers and dealers by simplifying loan applications and responding quickly with risk-based rates and terms. This has all resulted in an increase in lending opportunities and portfolio growth. 

Getting Started

defi SOLUTIONS is a leading provider of innovative lending solutions covering the complete lending lifecycle—lease and loan originations, servicing, collections, and remarketing. defi SOLUTIONS also offers a wide range of business process outsourcing services that are used by hundreds of lenders in the United States.  If you’re looking to improve lending efficiency and lower operational contact our team today or register for a demo.

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