Tips to protect and grow your loan portfolio beyond the pandemic

It is hard for anyone to know the comprehensive impact COVID-19 will have on the financial marketplace, especially since the pandemic itself is still happening. While the long-term impact of this crisis is still TBD, its short-term impact is becoming much clearer.

COVID-19 Impact

COVID-19 has had a direct impact on lending, specifically with auto and consumer loans. Indirect lending, new auto loans, and credit card usage have all seen a significant dip in light of the current crisis, especially for financial institutions in high-risk and low-income areas. The drop in face-to-face interactions, significant increase in financial strain, debt and unemployment, and regulatory shifts have all played a major role in these changes.

Additionally, many financial institutions have made loan adjustments to support the needs of their community and borrowers. Many of these changes, however, have opened up new areas of risk. These new, COVID-19 specific adjustments include:

• Offering loan payment relief program offers to borrowers, such as temporary loan forbearance and skipped payment options.

 

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