As mortgage advisers we have always helped people with personal loans, but recently we decided that we needed to get a smarter option and after much research we decided on a model which we simply call Smarter Loans.
When we started looking at how people were processing personal loans we found that the automated processes were not getting the results that many customers wanted – many were getting an automated message saying they were declined and there was no logic or reasons given for that answer.
People we spoke to were frustrated with the way they were treated by the personal loans that were meant to be easy.
We wanted to keep things simple, and not too “flashy”
What Makes Smarter Loans Different?
Many of the finance companies that promote personal loans and in particular debt consolidation loans are set up to process hundreds of loans automatically; however in doing so they cut corners that mean the level of approvals is poor.
We spoke to some lenders that were getting only 16% of applications approved, meaning that 84% were being declined.
This shocked us – we would be concerned if we had 16% being declined.
Obviously we wanted to make the application as easy as possible, and the processing of those applications quite easy too. We wanted to automate what we could, but after many hours assessing the options we discovered that we needed to add human intervention to ensure that we cleaned up the information before it was assessed by the lenders.
- The application is online and needed to be quite easy to complete – we wanted to make this as simple to complete, but to still get the information needed.
- The assessment starts with sourcing the credit checks and bank statements – these are analysed and the application adjusted if needed. This is the manual part of the application but ensures that everything is corrected before the lenders review for approval. From the credit checks we get the score and a list of all open accounts. We look for things like any undisclosed buy now pay later accounts which are a major cause of applications being declined, and also ensure that we can identify everything that is on public record. It’s common to find missed financial commitments that may even be paid off, but it many cases people don’t even know they still are noted as active.
- Everything is double checked – then submitted to the lender that is most likely to approve at the best possible terms.
This is a different approach to how most lenders treat personal loans.
We’ve only been going for a short while, but we have already seen some great results.
Kim approached us after being declined by a finance company who she had just received a letter from which congratulated her on being a great payer. The marketing letter she received seemed to promise that she would be able to borrow more, but when she completed their application she received an automated email saying she had been declined!
After assessing her application we needed Kim to close her three buy now pay later accounts, and we could then deliver the approval.
Kim, from Nelson
We could have replicated how everyone else does their personal loan applications, but if we had of done this then we probably would get the same results as everyone else and that’s not acceptable.
