Online Loan Submissions Producing Results

While many credit unions are operating indirect lending programs, one South Carolina CU is carving a unique niche. Online loan submission is proving to be one of the most productive and cost-effective loan generation tools in the lending toolbox. Here's how one CU, experiencing record indirect loan volume, is using technology to improve productivity and enhance their operating efficiency.




What's the Story?

In June of this year, SCFCU (Charleston, SC) enhanced its indirect lending program to accelerate the lending process and analyze their indirect portfolio. After an extensive search in the market for software capable of handling a full indirect lending program, DecisionApp indirect lending software was chosen as the medium to originate, underwrite, fund and track their indirect lending portfolio.

Here are the program setup requirements and numbers from Opal Jay, the CU's VP of Sales Finances:

  • Instant online approval is critical to our indirect lending program. The CU wants to immediately capture high quality loans that are submitted anytime, including after hours such as weeknights and weekends.
  • Online dealer communication is necessary to accelerate the indirect lending flow process. For example, time spent tracking down missing loan stipulations is minimized since online dealers are alerted instantly in their loan queue, of any items that are delaying funding on each indirect deal.
  • Online loan submission by the dealer network is increasingly important for our workflow process. The dealers have been surprisingly excited about the online submission and increasing numbers of our dealer network are submitting online.
  • The ability to track and pull reports on different pools of loans within the indirect lending portfolio such as boats and RVs.
  • June through November 2002, SCFCU's indirect lending program has received over 5,500 loan applications and funded more than $54 million with an average credit score of 698.

What do dealers think about online loan submission?

The dealership point of view regarding indirect lending has not changed. A dealership needs a lender to be responsive, consistent, competitive and excel in the two critical areas of loan decision turn around time and funding time.

Jim Duncan, of Duncan Boat Harbor (North Charleston, SC) explains it this way,
''With a few clicks of the mouse, Decision App enables me to see my loan history with the credit union. I enjoy being able to submit and receive online decisions anytime of day; this is essential since most lenders do not work dealership hours. Decision App works for me because I can see the loan status of my credit union deals. I know if a deal is being held up in funding, when a deal funds and my compensation all from looking in my online loan queue.''

Decision App Characteristics

Decision App allows the Dealer to input credit applications into an online platform. The Dealer has the ability to order and view credit reports, calculate financial ratios and choose which participating Lender(s) the electronic application will be submitted to. Once submitted, the dealer can also track the status of the application online, all the way through funding.

The electronic application's first stop after being submitted by the Dealer is Decision App's Automated Loan Decision. In this system each Lender can build a ''Risk Based'' evaluation model that pre-defines different grades, or levels, that an application may fit into based, on the applicant's credit profile. Within each grade, or risk level, the Lender can choose 35 different parameters for the system to test and the Lender can change parameters and rates at any time. If the applicant's profile passes all the tests, then the Dealer is notified within seconds that this application is automatically approved along with the rate and terms of approval.

If the applicant's profile fails one of the tests, then the Dealer is immediately notified that this application is being referred to a Loan Officer for further review and that they can expect a decision within the hour. The electronic application is then dropped into the Lender's online platform for the loan officer to review and make a decision.

The loan officer can review the Application, Credit Report and Ratio analysis, as well as communicate their decision back to the dealer. They can also generate adverse action letters for declined applications and cross-sell letters for approved applications. Decision App even calculates dealer incentives, funding amounts due each dealer and tests for Reg. Z rate tolerance.

Decision App also provides a suite of over 30 reports that allow the Lender the ability to track activity and profitability for a single dealer or for the whole portfolio. Month end, management and board reports are a mouse click away.

Test Drive our Decision App Indirect Lending Approach Today

Indirect Services, Inc., located in Salt Lake City, Utah, has served indirect lenders since 1996 and has software accounts nationwide. For more information visit and click on Decision App / software overview or email to receive a software demonstration or call toll free 1-877-485-7752.




Jan. 13, 2003



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