Aman Johal writes in
a December 2020 article in creditunions.com/blogs
that: “Nationwide quarantines and stay-at-home orders pushed consumers
to adopt a more conservative attitude toward debt. Consequently, the
overall demand for auto loans, particularly for new vehicles,
decreased. Low interest rates helped to partially offset this decline
in demand, particularly in used auto lending, which has fueled auto
growth in 2020.”
Credit unions should
by now have systems in place that allow them to expand their market
reach and make loans profitably to borrowers other than those rated “A+
and A”. Lending only to “low risk” borrowers means pricing to a level
such that profitability is questionable.
TCT’s Risk Based Loan Pricing
tool assures credit unions can reach deeper into the
loan pool and originate lower credit-grade loans that are profitable.