Lenders Protection™ is a risk management program featuring default insurance coverage for near-prime and non-prime auto loans.
The Lenders Protection™ program is a unique auto lending enablement platform that allows financial institutions and other auto lenders to model their specific overhead and funding costs and set a target ROA for their insured portfolio. The result is a profitable auto loan portfolio with carefully managed pricing and risk characteristics.
Earn higher yields with the assets you have
Take advantage of the existing application flows already being processed and increase return on assets and profitability.
Significantly increase your vehicle lending volumes
Provide more auto loans outside your normal prime lending guidelines and book more approved and conditioned loans.
Be up and running in weeks, not months
Lenders Protection™ is fast and easy to implement in 45 days or less, with no implementation fees or set-up costs.
Sophisticated analytics, customizable for your lending institution
As the lender, you control all credit decisions. Configure your own specific costs and desired ROA.
Fair lending compliant
The Lenders Protection™ program offers improved underwriting rules that identify qualified applicants in the near-prime and non-prime risk categories. It also includes an enhanced underwriting and pricing engine that allows the lender to approve and price individual loans to fit the portfolio design and profitability targets.
Pre-packaged third-party auto loan default insurance offered by two "A" rated carriers
High-quality default protection insurance allows you to mitigate, manage, and share risk effectively while still offering attractive rates.
Better service for borrowers
Reduce down payment requirements to help borrowers avoid expensive “buy here, pay here” dealers.
Improve auto dealer loan volumes and stronger relationships while expanding sales of auto loan related products (GAP waiver, warranty, insurance).
Is Lenders Protection™ a good fit for institutions of all sizes?
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 contract 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.