Personal loans are experiencing tremendous growth thanks to the fintech market. From 2008 to March of 2018, personal loans have increased from $72 billion in 2008 (equal to $90B in 2018) to $120 billion dollars, according to Quartz.

Alternative fintech lenders account for $31 billion of in personal loans, versus $22.5 billion for banks and $18.7 billion for credit unions, according to TransUnion data reported by Quartz. Banks have more than doubled personal lending since 2010. Still, the fintech sector’s growth in this area has increased from 1% in 2010 to about 33% now! The good news is only 6% of consumers hold this type of debt, so the upside is tremendous. Traditional financial institutions need a better way to compete.

The fintechs have been able to grow due to their lighter regulatory load, alternative scoring models, lack of legacy systems to corral them in and data-driven digital savvy. But community financial institutions have the advantages of holding a tremendous amount of data themselves, as well as having built trust in their communities over many years. With personal loans booming, banks and credit unions must take advantage where they can.

In addition to cleaning up and honing their data banks and credit unions can also utilize tech partners for broader marketing and distribution channels. Partners, like ILT’s Allegro Lending Suite, can provide a platform to achieve this goal. By working with local businesses and financial institutions, ILT provides a lending platform that connects financial institutions to local businesses where consumers often finance the products or services, making it possible for banks and credit unions to provide that funding.

The Allegro Provider Module allows businesses, like the local furniture store or orthodontist, to capture loans for you by offering their clients a payment solution. The proprietor gets his sale quickly and seamlessly, while your financial institution handles funding, payments and collections on the back end – all within one comprehensive platform.

The Allegro Provider Module offers administrative login control for security, providing peace of mind to your institution. The system pulls credit reports from all three major credit bureaus to support your underwriting needs, plus it’s completely customizable for automated approvals. It also provides automated and manual rate matrices and interactive debt-to-income analysis. The loan can be closed either at the provider’s office or your financial institution. And once you have the loan, cross selling through Allegro is a breeze!

Features include:

  • Comprehensive alerts system
  • Exception Control Notification System
  • Adverse Action and Credit Score Disclosure notices
  • Welcome letters
  • Document packet auditing and funding tools
  • ACH funding to providers
  • Optional open-ended loans with multiple draw-downs
  • Completely customizable reports
  • Internal Notes system
  • Real-time consumer and provider communications
  • Fully automated export to core management system
  • Paperless documentation and funding using DigiDocs™
  • Tools to insure compliance with government regulations
  • Dashboard for updates of critical statistics

As fintechs and other alternative lenders invade your market space, fight back with a trusted and powerful technology partner to maximize your lending prowess.