In a recent Internet Strategy Consortium survey, more than half of the online members planning to obtain an auto loan (59%) or a mortgage (55%) in the next year prefer to apply online, either at the credit union website or through online banking. Some online members do prefer the branch, but this preference is higher for the more in-depth mortgage application (36%) compared to auto loans (23%). Only about one-tenth of members are interested in loans by phone, for either loan type.
Surprisingly, proportionally more members in the Gen Y and older-than-60 age group prefer the branch. For younger members, this might be because of their unfamiliarity with the application process and loan types, as they also have a greater interest in loan-related educational tools and in-person seminars. Conversely, more members in the older-than-40 age group expressed interest in online loan application tools. This might be because they have more experience with loan applications than the younger age groups.
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Provide Supporting Resources
Although interest in online loan applications is high, many members are not aware of the benefits of such applications and are not are not likely to use them unless credit unions provide information and support. If members can't get their questions answered online, they may turn to more costly support options or to other loan providers.
Regardless of where members prefer to apply, they want detailed online information about loan types as well as calculators to help them compare loan options. Providing online information for members to review before using the branch or call center can help reduce the amount of time spent answering questions.
Members completing their applications at the branch or by phone also want to reach a loan expert by phone while members planning to use the branch tend to be more interested in in-person seminars. For both mortgages and auto loans, members using online applications expect online pre-approvals and quick loan approvals. These members also want the ability to email questions.
The ISC study demonstrates a significant opportunity for credit unions to expand convenience and lower their loan processing costs by offering easy-to-use loan applications along with supporting resources. Harnessing the efficiencies of online loan applications and approvals can lead to greater member satisfaction and higher loan penetration rates.