October 13, 2021
Webinar Recap: Home Improvement Lending: Tools for Helping Your Members
The pandemic has affected almost every facet of the lending space, but home improvement loans, in particular, have seen a major uptick. Paul Borghi, Vice President, Point-of-Sale Lending at LendKey, recently spoke to Randy Salser, President of NAFCU Services, about the competition amongst lenders, important trends in the market, the prime borrowers financial institutions want to serve, and how credit unions can tap into this growing asset class.
Paul joined LendKey in 2012 and served in various roles over his tenure, including playing an integral part in the launch of LendKey’s home improvement program. The LendKey Home Improvement Loan Program, which provides point-of-sale lending to homeowners through a nationwide network of contractors, saw an unprecedented 450% increase in loan applications in 2021 versus the previous year.
Webinar’s Key Takeaways
[4:47] Using a third-party sales channel in order to acquire financing reduces the cost of marketing, overhead, etc. It’s similar to the construction space where you are working with a merchant.
[5:13] Some of the metrics that come out of the space is the contractor increases or is able to acquire 30% additional projects at the point-of-sale [by offering homeowners financing at the point-of-sale].
[5:26] For the financial intuitions in the space, leveraging that third-party sales channel to acquire financing allows them to diversify [their balance sheet]… home equity loans or mortgage refi, which is extremely hot right now and difficult for consumers to get in a timely fashion.
[6:00] Our expectation is this increased demand is going to continue for the foreseeable future.
Capitalize on These Trends
With increased deposits and decreased demand in other loan asset classes, Paul shared several tools banks and credit unions can use as alternative lending solutions to deploy capital and further diversify their balance sheet.
LendKey’s Home Improvement Loan program offers unsecured loans to qualified, creditworthy homeowners through a nationwide network of contractors. The program includes credit-default insurance and offers financial institutions a way to mitigate risk through recurring loan participations.
Learn more about the opportunity by contacting LendKey today at firstname.lastname@example.org.
Show Notes and Research
Learn more about the successful growth year over year of LendKey’s Home Improvement program.