Pentagon Federal Credit Union is decreasing the number of canceled and withdrawn auto loan application thanks to a redirected focus on post-approval communication.
The number of canceled and withdrawn applications is 40% less than what it’d typically be in any given month since jumpstarting the new initiative in the first quarter, Ivan McBride, vice president of automotive lending products and sales told Auto Finance News. “We’ve got a lot of approvals, but just because we approve the member for a loan, it doesn’t always mean that we’re going to get that loan,” he said, adding that PenFed is making sure that it communicates with the member “right after approval” to close that loan as quickly as possible.
“That’s something that we didn’t focus on well in the past,” McBride said.
In reviewing “approve-not-funded reporting” for PenFed’s direct lending channel, McBride found that members who were approved for a loan were likely to “sit on that preapproval” for as many as 15 days if the CU didn’t communicate with them. “It’s very likely that they may get converted to financing somewhere else, so we needed to do a better job with the folks that have already come to us and have taken the time to fill out an application,” he said.
To that effect, PenFed is increasing its outbound call volume to approved members in order to encourage next steps, facilitate documentation and clarify any lingering questions. It’s a collaborative effort split between McBride’s team, underwriting and operations departments, and service centers and branches. “I know consumers are looking for an experience pre- and post-application that’s different and easy,” he added. “We’ve had some success — we’ve been able to have better communication with our membership and close more loans more efficiently.”