many credit unions are operating indirect lending programs, one
Utah CU is carving a unique niche. Online loan submission is proving
to be one of the most productive and cost-effective loan generation
tools in the lending toolbox. Here's how one CU is having tremendous
success generating quality loan volume…
In the first quarter of 2002, AFCU (Ogden, UT) initiated its indirect
lending program to increase its auto portfolio as well as provide
the convenience of point of sale financing to its membership.
Using DecisionApp indirect lending software as the medium to originate,
underwrite, fund and track their indirect lending portfolio.
are the program setup requirements and numbers from Randy Halley
& Scott Budge, the CU's VPs of Special Projects:
loan submission by the dealer network is essential for our workflow
process. The dealers are compensated according to industry standard
flat fees, therefore the three to four minutes to submit the
online application is not an outrageous requirement.
online approval is critical to our indirect lending program.
The CU wants to immediately capture the high quality loans that
are submitted anytime, including after hours such as weeknights
dealer communication is necessary to accelerate the indirect
lending flow process. For example, time spent tracking down
missing loan stipulations is minimized since online dealers
are alerted instantly in their loan queue, of any items that
are delaying funding on each indirect deal.
- In the
past three months, AFCU has received over 4,200 loan applications.
do dealers think about online loan submission?
dealership point of view regarding indirect lending has not changed.
A dealership needs a lender to be responsive, consistent, competitive
and excel in the two critical areas of loan decision turn around
time and funding time.
Woodward, Finance Director for Mark Miller Subaru (SLC, UT) explains
it this way,
"With a few clicks of the mouse, Decision App enables me to
see my loan history with the credit union. I enjoy being able to
submit and receive online decisions anytime of day; this is essential
since most lenders do not work dealership hours. Decision App works
for me because I can see the loan status of my credit union deals.
I know if a deal is being held up in funding, when a deal funds
and my compensation all from looking in my online loan queue."
App allows the Dealer to input credit applications into an online
platform. The Dealer has the ability to order and view credit reports,
calculate financial ratios and choose which participating Lender(s)
the electronic application will be submitted to. Once submitted,
the dealer can also track the status of the application online,
all the way through funding.
electronic application's first stop after being submitted by the
Dealer is Decision App's Automated Loan Decision. In this system
each Lender can build a "Risk Based" evaluation model
that pre-defines different grades, or levels, that an application
may fit into based, on the applicant's credit profile. Within each
grade, or risk level, the Lender can choose 26 different parameters
for the system to test and the Lender can change parameters and
rates at any time. If the applicant's profile passes all the tests,
then the Dealer is notified within seconds that this application
is automatically approved along with the rate and terms of approval.
the applicant's profile fails one of the tests, then the Dealer
is immediately notified that this application is being referred
to a Loan Officer for further review and that they can expect a
decision within the hour. The electronic application is then dropped
into the Lender's online platform for the loan officer to review
and make a decision.
loan officer can review the Application, Credit Report and Ratio
analysis, as well as communicate their decision back to the dealer.
They can also generate adverse action letters for declined applications
and cross-sell letters for approved applications. Decision App even
calculates dealer incentives, funding amounts due each dealer and
tests for Reg. Z rate tolerance.
App also provides a suite of over 30 reports that allow the Lender
the ability to track activity and profitability for a single dealer
or for the whole portfolio. Month end, management and board reports
are a mouse click away.
Drive our Decision App Indirect Lending Approach Today
Indirect Services, Inc., located in Salt Lake City, Utah, has served
indirect lenders since 1996 and has software accounts nationwide.
For more information visit www.indirectservices.com
or call toll free 1-877-485-7752.