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Loan Underwriting & Risk

Loan Underwriting & RiskExpanding the financial options available to your members through credit union indirect auto lending services can boost customer satisfaction and can ensure that your financial institution gets its fair share of the lucrative auto loan marketplace. Managing your indirect lending programs in a proactive way can help you to deliver the right options for your members. Here are some proven strategies to help make your indirect auto lending program a success.

Reevaluate Your Rates

Offering greater flexibility for your participating dealers in terms of available rates and qualification terms can sometimes expand the number of indirect auto lending arrangements completed for your credit union. By allowing a wider range of borrowers to qualify for your indirect lending options, you can often expand your reach among your local community. Taking a hard look at the interest rates offered by other lenders can also help you to stay competitive in the auto lending marketplace.

Build Lasting Relationships

Making contact with the dealers who participate in your indirect auto lending network can help you to build trust and to create a solid relationship with these integral components of your lending plans. By scheduling visits to the dealerships or touching base by telephone, your credit union can ensure that you remain in the forefront of lending options for these partners in the field.

Stay in the Loop

Staying current with the performance of your auto loan portfolio and monitoring percentages for loan-to-value ratios and default rates can help you identify problem areas before they become serious financial concerns. You should also enforce strict limits on interest upcharges by dealers in your network. By tracking your auto loan portfolio, you can identify dealers who perform for your credit union and those who may not be as motivated to present your indirect lending products to customers in their dealerships.

Incentivize Dealers

In some cases, you may be able to motivate participating dealers to promote your products more effectively by creating reciprocal preferred dealer and preferred lender arrangements with dealerships that go the extra mile for your credit union indirect auto lending program. Increasing the reserve available for lending arrangements with these dealers can pay off in more auto loans and a stronger relationship with top-performing dealerships in your area.

At CUAC, we specialize in creating customized indirect lending solutions to help your credit union compete in the lucrative auto loan marketplace. Our team can help you put your credit union’s lending options in front of consumers at the point of sale, allowing you to capture new members and new loans to increase profitability for your financial institution and your members. Call us today at 866-970-2822 to schedule a consultation with us. We look forward to providing the best credit union indirect auto lending solutions for your business.