What size lenders participate in Lenders Protection?
Lenders Protection is attractive to lenders of all sizes that have an interest in increasing new and used auto loan volume through either direct or indirect lending channels. There are no implementation costs, software costs, maintenance fees or other up-front costs. Lenders only pay on those loans they choose to insure.
What is the average recovery on losses for defaulted loans?
The average recovery on losses will vary by lender, but the portfolio averages approximately an 85% recovery of deficiency balances.
How does the Lenders Protection risk-based pricing model work?
Each lender sets unique financial goals expressed as a targeted yield after all costs and expenses. Generally, lenders can earn 300% to 400% higher net ROAs on Lenders Protection loans than they earn on their prime auto portfolio. Lenders Protection returns suggested contact rates based on the risk of the loan and the lenders’ targeted yields. These suggested contract rates also incorporate the costs to insure a loan in the program.
Is the lender or the borrower the one actually insured?
With Lenders Protection the lender not the borrower is the insured. There is no disclosure to the borrower that the lender has purchased insurance to protect the loan.
What extra marketing costs should a lender expect by adding Lenders Protection?
Lenders Protection allows you to capture more loans, but does not require the generation of new business activity. Instead, it takes advantage of the existing applications already being processed through your institution. Vehicle loan applications are denied or conditioned for a variety of reasons. Lenders Protection enables you to approve and book more of these borderline loans without unduly increasing your risk.
What does it cost to use Lenders Protection?
There are no upfront costs to start Lenders Protection. When submitting applications to Lenders Protection there is the additional cost of a credit pull request and the costs to insure the loan against default.
Is Lenders Protection available for motorcycles or recreational vehicles?
Currently Lenders Protection is only available for automobile loans and light trucks.