Nearly 40% of credit unions say no to installment loans

Traditionally, consumers have relied on their primary financial institutions (FIs), such as banks or credit unions (CUs), for credit products like credit cards, mortgages, auto loans and personal loans. However, increased competition from non-bank and non-credit union financial entities has led consumers to shop around for better deals. 

In “Credit Union Innovation: How Credit Product Rates Impact FI Selection,” PYMNTS Intelligence drew on insights gathered from a survey of over 4,000 consumers, 100 credit union executives and 50-plus FinTech executives to examine consumer criteria for choosing credit products, which in turn determines their choice of financial institutions (FIs). 

According to the joint PYMNTS-PSCU study, more than 75% of account holders say their primary FIs offer one or more of these major credit products, and 63% report having at least one of these products from their primary FI. However, when it comes to mortgages and auto loans, consumers were willing to explore different options to secure the most favorable interest rates and payment terms. 

The study also found that across all credit products, rates and terms are the most important factors for consumers when selecting an FI and the main reasons for switching accounts to another FI with better offerings. Notably, at 32%, CU members were more likely to switch FIs, compared to 26% of non-CU members.

 

continue reading »