System Discovery – Risk-Based Pricing

Imagine that you have two credit union members applying for an auto loan with your credit union.

Both members have identical credit scores, and both are purchasing the exact make and model new car. Do you underwrite and price the applications for both members, exactly the same?

Of course not (at least I hope not).

Imagine being able to process lending applications instantaneously through automation


As part of your underwriting decision and pricing processes,

you would (should) employ risk-based evaluation to examine relevant factors, such as length of time on the job, age of the credit report history, tradeline information, debt to income ratio, Loan-to-value and other critical decision and pricing factors, to make a final and separate determination for each individual member. Even though they have the same credit score.

Taking it further, even if you had two members presenting identical credit scores AND credit profiles, but whose purchases (in this case the collateral) differed in one way or another, for example, by model year, mileage and term. Perhaps one member is offering a 50% down payment that includes a trade-in, eliminating a trade-line and monthly payment, while another member has only a 10% down payment and no trade-in, thus adding a second tradeline payment. Consistent, effective, quality underwriting, especially combined with pricing is a complicated process.

Imagine being able to process these types of lending applications instantaneously through automation, with the confidence that the evaluation would yield accurate underwriting on this granular level, every time, in seconds. Imagine also being able to utilize this underwriting process to instantly and consistently set pricing levels (APRs’) for every loans approved by your institution.

There is no need to imagine such a scenario

Lendsys makes efficient, consistent, and reliable risk-based evaluations and automated individual loan decisioning and pricing a reality.

A cartoon person drawn with a lot of arms and faces to show how much you can do with lendsys
Lendsys safeguards your lending process in two ways:
  • First, our automated system helps assure that you automatically approve only the loans you want while automatically declining high-risk applications, so you don’t spend time sifting through applications to try to find the good ones.
  • Second, the automation actually helps shield you from potential discrimination and inconsistencies and exceptions that can get you in trouble from a regulatory standpoint.

To Learn more about the benefits of automated lending processes, and how you can build a competitive and sustainable loan origination program, especially applied to increasing your overall core lending competence, quality, and lending consistency, schedule a demo today.

Or read more about Lendsys for your organization here:

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