Dec 19, 2019
Most of you reading this probably get in a car and drive to work every day. If you choose to live in the city you might choose to bike or take public transportation. But what about those who don’t have the luxury of choice?
Living close enough to work to walk is one option, but what if you need to change jobs and you don’t own a car? It significantly hinders where you can work or live, your possibilities for getting groceries, the opportunities your children might have for after school activities, where you can take your family to the doctors and more. Those who might be able to least afford it are forced to pay more for other life necessities when they don’t have the flexibility of a personal vehicle.
These hard-working Americans may also be most vulnerable to high-interest, subprime loans. I recently read in City Lab that as much as 26% of all auto loans issued in 2016 hit this market, up from 14% just seven years prior.
Scrupulous lenders must begin to serve these consumers, the most susceptible among us. Some don’t think they deserve better, while others don’t know greater opportunities exist for them beyond the buy-here, pay-here model or other rate-gouging lenders. Banks and credit unions can do better to reach out to these borrowers and offer fair loans. Here’s how:
People do business with people, not companies. Personalize your business so these consumers can better relate. Once you get them in, ensure they have a single point of contact for help to create an emotional bond with their representative. This will also bond them to your institution.
Money is a very delicate subject, and many of these borrowers have been burned before. Demonstrate to them how they can get the help they need with respect and dignity. Show them how you’ve assisted others with getting that much-needed, used SUV to get to work and to grandma’s for the holidays. Then do the same for them. Don’t be their lender of last resort – even if you are. Act like their lender of choice, and you will be.Share
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