Partner Article: Advisory Lending: A Borrower Experience Approach

By: Ken Dickerson, Vice President of Sales, LenderClose

The following post is part of a series of blogs written by MeridianLink Partners who will be attending MeridianLink LIVE! User Forum in May 2022. To learn more about the event,Click here.

Today’s hectic nature demands speed and efficiency in all aspects of life. When it comes to managing their finances, borrowers not only look for speed and efficiency, but also for competent service.

When experiencing currency stress or looking to build equity, borrowers may have a specific product in mind. However, that doesn’t mean it’s the product they need. If loan officers take more time to delve into what is really going on with the borrower, they can direct them to a product that might better meet their needs, leading to a better borrower experience.

People looking for financial assistance typically research their options and seek recommendations from their peers to determine the best fit. Consider what the outcome might be if loan officers instead had to make recommendations for alternative loan products that would be better suited to each borrower.

For example, in today’s environment, if a borrower has said they want a consolidation loan, a loan officer‘s first reaction may be to simply fill out the application. With just a little extra dialogue, the loan officer may realize that a home equity loan is a better option with better terms. Not only could they have saved their borrower from unnecessarily high interest rates, but they also generated trust, loyalty, and provided a better borrower experience. This “advisory lending” mindset encourages staff to think holistically about FI offerings and take on the role of problem solver instead of order taker.

A new lending mentality

By embracing an advisory lending mindset, loan officers are encouraged to be the borrower’s trusted source for financial solutions they might not understand or know existed. Loan officers are able to strengthen relationships and build loyalty through a total service-focused borrower experience.

It starts with educating and making sure loan officers understand the institution’s set of offerings to match the borrower with the best option. This education involves a comprehensive review of the requirements and benefits of each loan. Additionally, it is essential that these loan officers are trained on how each loan can fit into real-world scenarios so that they can then identify opportunities.

Keep in mind that how you approach a borrower is also important. When discussing sensitive topics, such as personal finances, loan officers need to be able to have those conversations without being intrusive. Start with informal questions such as “How are you?” and “How was your day?” This approach allows the loan officer to establish a relationship and better understand the entirety of what the borrower is going through.

During this additional dialogue, loan officers should be active listeners. This forces them to pay attention to verbal and non-verbal communication, such as the borrower’s tone or body language (shaky leg, lack of eye contact, etc.) to determine if the borrower is comfortable with the conversation and the best way to proceed. All of this contributes to becoming a trusted advisor.

By making good use of the interpersonal skills loan officers have already honed, lenders can create an exceptional borrower experience through a consultative lending approach and show they care about the borrower and want to meet their needs. instead of just getting their business. Mastering the execution of advisory loans may require a change of mindset for those wishing to improve their lending operations.

Support the strategy

EAssessing the structure of your lending service, the technology you use, and your existing workflow is necessary for execution at scale.

All In Credit Union, a $2.1 billion financial institution based in Alabama, evaluated its structure, workflow and process and came to the conclusion that it was possible to take advantage of connectivity within of MeridianLink to strengthen HE loans. This led them to a partnership with LenderClose, the leading technology platform for HE loan workflow automation. The API-based integration between LenderClose and MeridianLink helped All In achieve its goal of “making home equity lending more like a car loan.”

The combined power of a consultative approach, MeridianLink and LenderClose provided Todd Peeples, Senior Vice President of Sales and Lending at All In, what was needed to quadruple their HE loans. “The ease of use has made the whole process less daunting for staff. This has led to increased production and better service to members,” Peeples said.

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