Indirect lending is a large part of many financial institutions’ auto lending strategies. In fact, in 2020, credit unions held $378.2 billion in auto loan balances, or roughly 31.5% of all auto loans in America. Of that, 84.4%, or $319.4 billion, was funded through indirect channels.
If indirect borrowers make up such a large percentage of your institution’s auto lending portfolio, and you’re not focusing your efforts on engaging and serving this population, you could be missing out on a huge opportunity to build a relationship with your indirect borrowers. Effectively engaging with indirect borrowers offers a unique opportunity to change their experience of your institution from a generic finance company that holds their auto loan to being an active participant in their financial lives. To accomplish this, you’ll need two critical tools:
- Convenient and secure payment options that will provide a seamless user experience for your indirect borrowers, making them more likely to make loan payments promptly and avoid payment default. It can also help your institution increase profitability by creating potential future revenue streams while saving you time, money, and exposure to risk.
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