Consumer lending has been a thing of the past for most community banks since credit cards took over unsecured small dollar lending in the 1980’s. Some banks try to compete with credit unions and auto companies for indirect car paper but that has diminished as well due to unprofitable low rates the competition is providing. Core processors have been slow to react to financial technology firms who are providing young consumers with products and services they want and use…digital lending.
Until now, community banks have been shut out of this market. Quilo is a digital lending tool that allows banks to make and underwrite the loans while allowing the smart phone app to fund, collect, and manage consumer loans profitably. Quilo provides instant access to loans of $250 or more through a virtual card on your customer’s phone. Consumers can also use Quilo to pay down or pay off high interest rate credit cards or replenish their checking account at your bank for recent debit card purchases.
Your bank has complete control over the credit risk. Maintaining minimum and average credit scores of the portfolio ensure that credit quality remains high. The Quilo scoring engine does a soft pull of the consumer’s credit bureau report to determine if a loan should be made and what amount. If the consumer qualifies and takes a “Quilo” the interest rate is calculated based on risk of loss, bank’s cost of funds and desired return, and processing costs. Typically the interest rate to the consumer will be between 8% and 12%. The term of each loan is determined by the consumer. The return to the bank is 5%-6%. A pretty good yield given today’s interest rate environment.
To set up a 45 minute demo of Quilo demo contact Strunk at email@example.com or 800.728.3116.