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LenderHub

SWBC's LenderHub blog is a one-stop resource for lenders.

 

Recent Posts

Creating a Sales and Service Culture

A sales and service culture is an environment in which everybody at a financial institution is motivated and well-equipped to present products to borrowers that benefit them on an individual level. The institution moves beyond viewing its customers transactionally and encourages its employees to treat all product offerings as personalized opportunities to better serve the people they engage.

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Beyond the Numbers: Sharing Sales Best Practices Between Vehicle Protection Partners

When adding new products to their portfolios, financial institution executives have many issues to consider. A well-thought out introduction and delivery of new products to the customer is essential to a smooth rollout. This is especially the case with vehicle protection products like Guaranteed Asset Protection (GAP) and Major Mechanical Protection (MMP) coverage. From their first touch of the product to their last, the customer’s experience should be consistently positive, especially in a digital age where experiences are so easily shared across social networks.

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Revenue Diversification: The Antidote to Today’s Low-Yield Loan Interest Rates

It's no secret that auto loan yields are at low levels due to industry-wide low interest rates. According to the NCUA, the national average for a new vehicle loan with a 48-month term was 2.58%, as of December 2015. However, Forbes recently found a financial institution offering vehicle loans for 0.74%. While there has been some news on interest rates rising, the reality is that today’s competitive marketplace is clearly keeping rates in a low holding pattern.

The good news is that loan origination volumes are increasing in this low-interest-rate environment. The bad news, of course, is that financial institutions are experiencing low overall revenue yields. In the worst-case scenarios, financial institutions are wondering how they can continue to survive in this market.

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Key Attributes of a Great GAP Provider

Financial institution borrowers expect a wide range of valuable services. In particular, they appreciate services that have their backs. For example, Guaranteed Asset Protection (GAP) coverage gives them a safety net if their vehicles are ever totaled or stolen and not recovered—helping cover the difference between insurance companies’ reimbursement fees and, in most cases, the actual cost of replacing the vehicle.

Many of your borrowers simply cannot afford the hundreds, or even thousands, of dollars they would need to make up the difference. So, instead, they often purchase vehicles that are of lesser value than their previous car or truck.

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Maximize Your Auto Lending Strategy By Cross Selling

Does your institution take advantage of tax season to increase auto loan promotions? If not, perhaps that is something you should consider, and for good reason. As of March 6, according to the IRS, the average tax refund is $3,034, a 3% increase from the same time last year. In addition, car sales tend to rise during tax season. According to Edmunds, car sales peaked around May for most manufacturers. If your customers are planning to get behind the wheel of a new vehicle this year and have an influx of extra cash, they will likely turn to you to meet their auto lending needs.

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Think Outside the Vehicle Box to Increase the Value of Your Auto Loans

If you have a rock star team of loan officers, and I’m sure you do, chances are they are offering Guaranteed Asset Protection (GAP) to each one of your auto loan borrowers. There’s no question to either financial institutions or borrowers, that due to many of its benefits, GAP is a necessary auto loan protection product that should be purchased whenever a customer finances a new car, truck, or SUV with you.

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Four Ways Major Mechanical Protection Insurance Can Strengthen Your Used Auto Lending Strategy

Generally speaking, aside from a home, a vehicle is the most expensive asset your borrowers are going to purchase. Adding Major Mechanical Protection Insurance (MMP), also know as an extended warranty, to your product lineup and extending this option to your customers is a mutually beneficial way to provide added protection to your borrower's vehicles—particularly used vehicles—while generating significant fee income for your institution.

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