Second Look Auto Program
Beneficial State Bank’s second look program was created to provide access to credit for people with limited or no credit experience. The program was designed to create an affordable credit avenue for customers who would otherwise not qualify for a loan based on our standard underwriting. Qualifying loan recipients would automatically receive a rate reduction once the first 12 payments were made on time.
THE PROJECT
Auto loan applicants with limited or no credit history would not qualify for a loan based on our standard underwriting process. People who fit this profile have long been denied access to credit, or the ability to finance a vehicle, due to their lack of prior credit. Denying a loan applicant simply for having a lack of prior credit is a blunt approach in response to a lack of information and the decision is typically not reflective of an applicant’s actual credit risk. Recognizing this, Beneficial State Bank designed the second look program for applications where applicants had limited or no credit history and met the following criteria:
Vehicle Age: 5 model years or newer
- Mileage: 75,000 miles or fewer
- Maximum Loan: $15,000
- Maximum Term Length: 60 months
Vehicle Age: 8 model years or newer
- Mileage: <100,000 miles (99,999 max)
- Maximum Loan: $12,000
- Maximum Term Length: 60 months
Loan Terms:
- Interest rate: 15.99%
- Down Payment: Minimum 10% down payment required
- No more than $500 can be deferred, and deferred down may not be within 30 days from the first payment to Beneficial State Bank
- Maximum Loan-to-Value: 120% of Kelley Blue Book Wholesale Value
OUR IMPACT
From program launch in March 2017 until program end in November 2019, we originated 355 loans totaling $3.79MM. Of these, 84 loans earned rate reductions and a remaining 107 loans may yet qualify for rate reductions as of January 2020. Rate reductions provide even more benefit through rate savings for qualified customers.
We reviewed a total 10,003 applications for this product.
355
loans
in the Second Look Auto Program
84
loans
earned rate reductions
MOVING FORWARD
Beneficial State Bank is committed to increasing credit access and ensuring fair loan terms to people with limited and no credit history. The bank is currently exploring other ways to best serve these individuals, which may include using credit scores that incorporate additional sources of data to better understand the true credit risk of these applicants.
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