Posted by MeridianLink | March 7, 2022

Partner Post: Consultative Lending: An Approach to Borrower Experience

By: Ken Dickerson, VP of Sales, LenderClose

The following post is part of a series of blogs written by MeridianLink Partners who will be attending the MeridianLink LIVE! User Forum in May 2022. To learn more about the event, click here.

The fast-paced nature of today requires speed and efficiency in every aspect of life. When it comes to managing their finances, borrowers are not only looking for speed and efficiency, but knowledgeable service as well.

When experiencing monetary stress or looking to build equity, borrowers may come with a specific product in mind. However, that doesn’t mean that’s the product they need. If loan officers take extra time to dive into what’s really happening with the borrower, they can direct them to a product that might better meet their needs, leading to a better borrower experience.

People seeking financial assistance typically research their options and seek recommendations from peers to determine the best solution. Consider what the result could be if loan officers were to instead make recommendations for alternate lending products that were a better fit for each borrower.

For instance, in the current environment, if a borrower said they wanted a consolidation loan, a loan officer’s first reaction may be to simply complete the application. With just a little additional dialogue, the loan officer may realize that a home equity loan is a better option with better terms. Not only could they have potentially saved their borrower from unnecessarily high interest rates—they’ve also generated trust, loyalty, and provided a better borrower experience. This “consultative lending” mindset encourages staff to think holistically about the FI’s offerings and take on the role of a problem solver instead of an order taker.

A New Lending Mindset

By adopting a consultative lending mindset, loan officers are encouraged to be a borrower’s trusted source of financial solutions that they may not otherwise understand or know existed. Loan officers are able to strengthen their relationships and cultivate loyalty through a borrower experience that focuses on total service.

This starts by educating and ensuring loan officers understand the institution’s entire book of offerings to match the borrower with the best option. This education involves a comprehensive review of the requirements and benefits of each loan. Also, it is vital that these loan officers are trained on how each loan may be compatible with real-life scenarios so they can later identify opportunities.

Keep in mind that how you approach a borrower is important as well. When discussing sensitive subjects, such as personal finances, loan officers must be able to have these conversations without being intrusive. Start with casual questions such as “How are you?” and “How has your day been?” This approach allows the loan officer to build rapport and better understand the entirety of what the borrower is experiencing.

During this additional dialogue, loan officers should be active listeners. This requires them to pay attention to verbal and nonverbal communication, such as the borrower’s tone or body language (shaking leg, lack of eye contact, etc.) to determine if the borrower is comfortable with the conversation and how best to proceed. All of this feeds into becoming a trusted advisor.

By making good use of the interpersonal skill sets that loan officers have already honed, lenders can build an exceptional borrower experience through a consultative lending approach and show they care about the borrower and want to meet their needs instead of just getting their business. Mastering the execution of consultative lending may require a shift in mindset for those that want to enhance their lending operations.

Supporting The Strategy

Evaluating how your lending department is structured, what technology you use, and your existing workflow is necessary to execute at scale.

All In Credit Union, a $2.1 billion Alabama-based FI, evaluated their structure, workflow, and process and came to the conclusion that there was an opportunity to leverage the connectivity within MeridianLink to bolster HE loans. This led them to a partnership with LenderClose, the leading tech platform for HE lending workflow automation. The API based integration between LenderClose and MeridianLink allowed All In to realize their goal of “making the home equity loan more like a vehicle loan.”

The combined power of a consultative approach, MeridianLink and LenderClose equipped Todd Peeples, SVP of Sales and Lending at All In, with what was needed to increase their HE loans four times over. “The ease of use has made the entire process less intimidating to staff. This has led to increased production and stronger member service,” Peeples said.

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