Cause and effect. Some concepts are simple such as applying heat to ice and seeing what happens. Others, such as in scientific research, can be much more complex before being proven. For example, The Washington Post and other news media reported this week that links cellphone usage to the development of horns growing on the base of young people’s skulls. While this is a long way from ever being confirmed, it sure grabbed a lot of attention.
Luckily for lenders, cause and effect is much simpler when it comes to gauging how your loan origination system supports indirect lending success. Here are three examples of loan software functionality that could cause a lot of trouble for your financial institution if not provided by your platform:
- Automated Dealership Communication: Many financial institutions note that a great deal of their success is constrained by back-and-forth with the dealerships to provide information needed for stipulations. Check to see if your LOS can offer automation on some of these time-consuming tasks, such as automatically sending reminders to upload required documents—and a way for the dealership to easily upload them.
- Collateral Management (Dealer Book-out and Automatic Lookup Support): Making sound loan decisions is a function of the quality of information you have before you. When an application is imported, the system bears the responsibility of pulling the borrower’s credit, evaluating their income and debts, and calculating key ratios such as loan-to-value (LTV), which has a dependency on the collateral imported with the application. Your system should be able to automatically perform a VIN search to get the best assessment of the value of the vehicle as possible.
Also, if the dealer uses an approved book version and you are comfortable, you should be able to configure the system to rely upon the imported value for LTV. Finally, if the vehicle changes, you should be able to book the new vehicle.
- Application Imports in Lieu of Dealertrack and RouteOne: Some dealerships are too small to have access to Dealertrack and RouteOne. Because of this, they often feel relegated to the world of faxing. In this technological age, more financial institutions are shying away from taking deals in that manner. So, is there something that can be offered to those smaller dealers that will give them a direct connection to your financial institution?
A dealer application is a very easy way to expand your business to dealerships that otherwise wouldn’t be able to send you deals. It is important to be able to brand and control the website, set up users that are authenticated, and have a responsive web design that can be used on a tablet, mobile device or PC.
Our partners at Coastal Credit Union chose MeridianLink’s LoansPQ platform for greater indirect lending success. By implementing LoansPQ, Coastal Credit Union increased consumer loan volume by 78 percent, improved pre-approval functionality, and achieved seamless integration of loan origination and account opening by also implementing MeridianLink’s XpressAccounts solution, which runs on the same platform as LoansPQ to deliver even greater efficiencies.
“The admin set-up was also a lot more robust than what we had before,” said Crystal Robinson, Service and Delivery Manager for Consumer Lending at Coastal Credit Union. “There are a lot of criteria such as price adjustments and custom lists in LoansPQ, which were missing in our old system, that allow us to better drive the applications to our customized queues.”
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