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2022-03-29
Is Auto Loan Refinancing the Best Kept Secret in Personal Finance?
The refinancing industry at large has always been dependent on consumer awareness. Yes, almost everyone who is buying a home or car (or paying for a college education) knows they’ll need a loan. How many of those people, however, are aware they can refinance their loan?
Beyond being cognizant of refinancing options, there are other barriers in place. A considerable amount of consumers are unaware of how much they can actually save, or simply don’t want to deal with the hassle and paperwork. It’s why 78% of American homeowners opted not to refinance their mortgages in 2021, despite lower interest rates driven by the pandemic.
The Opportunity in Auto Refinance
When it comes to auto loans, over 50% of consumers aren’t even aware they can refinance. That represents a fairly large chunk of the market that is not being properly addressed. And while the pandemic led to greater consumer awareness ― Google searches for auto refinancing increased by 40% from 2019 to 2020 ― refinancing still only makes up roughly 5% of auto loan originations.
Even before the pandemic, the digital acceleration of financial services resulted in more people buying and financing vehicles online. When lockdowns went into effect, along with the subsequent surge in car sales brought on by reduced rates and stimulus spending, it became more clear that refinancing lenders were going to have better access to consumers.
And while the improved interest rate environment did represent a prime buying opportunity, it was inevitable that those same consumers would be in the market once again, only this time for refinancing. According to a survey, 26 of 73 million consumers would be highly motivated to refinance their loan. From a marketing perspective, most are looking for “payment-based savings” (i.e., lowering their monthly payment) rather than simply reducing their APR.
How Lenders Stand to Benefit
For lenders and marketers, the advantages of auto loan refinancing go beyond the obvious consumer need. It also represents an attractive opportunity to build better, more cost-efficient customer relationships. For example, since most delinquencies occur within the first few months a car is purchased, auto loan refinancing typically has a better risk profile and performance than auto purchase loans.
Similarly, direct-to-consumer (i.e., lender-generated) auto loans generally perform better than dealer-originated loans, which usually have higher markups. When you consider that nearly 80% of consumers finance their cars with dealers, the opportunity for auto loan refinancing becomes even bigger.
Auto loan refinancing is also easier to market than auto purchase loans, since lenders, brokers, and lead generators are able to eliminate the challenges of identifying or predicting which consumers are in the market for an auto loan. They can also target which consumers are less likely to default based on previous track records of loan payment.
Targeting Consumers With Technology
While it’s clear there is a big market for auto loan refinancing, coupled with the benefits for lenders and third parties, the art of effectively engaging consumers remains elusive. Historically, banks and credit unions have been slow to explore and grow the necessary channels. Since auto loans are smaller than mortgages for example, the transaction costs for originators are relatively higher.
On top of that, the cumbersome nature of refinancing a vehicle can also be difficult to market, especially with younger demographics that are mostly concerned with convenience. For Gen Z specifically, they are going to seek out refinancing options that are as frictionless as possible and available in the palm of their hand.
That’s where technology comes in. The rise of fintech and AI have not only made it easier for lenders to target the right consumers, but for those same consumers to find the best refinancing offers for their needs in the most hassle-free way possible.
As opposed to traditional credit models, AI incorporates greater data and algorithms to optimize the experience for every consumer, finding them the best rates possible based on their risk profile. In addition, AI underwriting also automates the loan originating process, resulting in more instant credit decisions and less paperwork for lenders.
Through open banking technology, consumers also have less paperwork on their end thanks to pre-populated application fields. These barriers may seem minor (e.g., populating a consumer’s VIN or license plate number), but add up in the grand scheme of streamlining the process. AI models also help in presenting instant soft credit decisions, like pre-approval, which provide consumers better assurance they will get the product they are looking for.
Ultimately, AI and automation reduce the overhead that has burdened brick & mortar financial services for decades. With a market that still has exponential room for growth, it’s important for lenders and third-party brokers to not only highlight the benefits of auto loan refinancing to consumers, but also the technological advancements that have made finding and applying for the right product easier than ever.
Disclaimer: The material provided on this site is not intended to provide legal, investment, or financial advice or to indicate the suitability of any Even Financial product or service to your unique circumstances. For specific advice about your unique circumstances, you may wish to consult a qualified professional. Any information or statistical data sourced by Even Financial through hyperlinks, from third-party websites, are provided for informational purposes only. While Even Financial finds these sources to be accurate, it does not endorse or guarantee any third-party content.
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Even
Even Financial Adds Tally's Low-Interest Line of Credit to its Embedded Finance Marketplace
NEW YORK, NY, March 15, 2022 -- Even Financial ("Even"), the category-leading embedded finance marketplace and independently managed subsidiary of MoneyLion, Inc. (NYSE: ML), has announced a new partnership with Tally, a leading financial automation company, to include the company's low-interest credit offerings on its platform.
"Tally has built a powerful tech-enabled system to help people solve one of the biggest financial problems today: paying off credit card debt," said Phill Rosen, Founder and CEO of Even. "We're thrilled to welcome Tally's line of credit offerings to Even's unparalleled network of financial services providers."
Tally is designed to help its members pay off their debt faster and save them money on interest and late fees. Members can lower their monthly payment with Tally's lower-interest line of credit, if eligible. Typically, at least a 580 FICO score is needed. Tally's system is customized to save people as much money as possible.
"Americans today owe nearly $1 trillion in credit card debt. We know from our research that many want to pay down their debt but struggle to get started. That's where Tally comes in," said Jason Huynh, VP of Credit, Analytics & Operations at Tally. "Our system combines financial automation with a low-interest line of credit to give people the help they need to get on track to pay off their credit card debt for good. We're thrilled that our partnership with Even will allow Tally to help even more people."
The launch of Tally on the Even platform enables consumers to get matched with Tally's custom, low-interest line of credit accounts of up to $25,000 in just a few minutes. After getting matched, eligible consumers complete the process through the Tally app. There are no out-of-pocket costs.
Tally is the latest partner to join the Even marketplace, a growing network of over 400 financial services partners and 500 channel partners covering a breadth of financial services including loans, credit cards, mortgages, savings, and insurance products. Even's marketplace technology enables any company to add financial products to its business, with full compliance and security, at scale.
About Even Financial
Even digitally connects and matches consumers with real-time, personalized financial product recommendations from banks, insurance carriers, and fintech companies on mobile apps, websites, and other digital touchpoints through its marketplace technology. Even's infrastructure leverages machine learning and advanced data science to solve a significant pain point in financial services customer acquisition, seamlessly bridging financial services providers (such as SoFi) and channel partners (such as TransUnion) via its industry-leading API and embedded finance marketplaces. Even enables any company to add financial products to its business, with full compliance and security at scale. Even was named one of "America's Best Startup Employers'' by Forbes for 2021 and was named to the 2021 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world. Learn more at www.evenfinancial.com.
About Tally
Tally is a consumer financial tech company pioneering full-service financial automation to help people save money, pay down their debt and reach their goals sooner. Founded in 2015, the company built the first fully automated debt manager to help put billions of dollars back in people's pockets. In 2021, Tally was named to Fast Company's Most Innovative Companies list and to Quartz's Best Companies for Remote Workers. Previously, Tally made Forbes' Next Billion Dollar Startup list, Forbes' Fintech 50 list, and the app won Real Simple's Smart Money award. Learn more at meettally.com.
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HAVEN LIFE
Haven Life’s All-Digital Life Insurance Application Experience Launches on Even Financial’s Leading Life Insurance Search Engine
Even features the industry's largest multi-carrier, all-digital life insurance marketplace
New York, New York August 16, 2021Even Financial (Even), the leading search, comparison, and recommendation engine for financial services, has announced the launch of Haven Term and Haven Simple on its life insurance marketplace platform. Leveraging machine learning and advanced data science, Even solves a significant pain point in financial services customer acquisition by seamlessly bridging financial institutions and channel partners via its industry-leading API and embeddable solutions.
With the addition of Haven Term and Haven Simple, Even has further expanded its extensive network of premium life insurance offerings, strengthening its position as the industrys largest multi-carrier, all-digital life insurance marketplace. Haven Life, which offers Haven Term and Haven Simple, and is backed and wholly owned by Massachusetts Mutual Life Insurance Company (MassMutual), is known for its customer-centric approach and for its commitment to making life insurance more affordable and accessible. Haven Lifes term life insurance offerings will be available on Even properties and via its wholly owned subsidiary LeapLife.
"In these uncertain times, the majority of U.S. adults want the financial security of high-quality life insurance, but are often dissuaded by the complex application process and need to complete an in-person medical exam", said Phill Rosen, Founder and CEO of Even Financial. "Haven Life's groundbreaking, all-digital application experience brings tremendous accessibility and peace-of-mind to consumers. We're thrilled to welcome them to the Even platform."
The launch of Haven Term and Haven Simple on the Even platform enables consumers to get matched with medically underwritten term life insurance policies that they can apply for and, if approved, purchase instantly online. While most Haven Term applicants will need to take a medical exam, Haven Simple applicants do not. Haven Life's offerings expand the variety of life insurance options already available to consumers through Even's API.
"Haven Life is committed to meeting life insurance customers wherever they are — and often, it's where they are managing the rest of their financial life," said Wade Seward, Head of Distribution Strategy at Haven Life. "On the heels of introducing even more affordable pricing for the Haven Term product, our partnership with Even Financial allows us to marry that affordability with greater accessibility to offer comprehensive financial protection to shared clients with ease and efficiency.
Even entered the life insurance industry in 2020 through its acquisition of LeapLife, a leading insurtech and licenced life insurance agency. Since that acquisition, Even has worked with its large network of channel partners to make the process of getting personalized life insurance fast, easy, and accessible for consumers. In addition to Haven Term and Haven Simple, products offered by leading insurance companies including Lincoln Financial Group, Pacific Life, and Mutual of Omaha are available through LeapLife, Even's life insurance platform. Companies such as TransUnion and Lantern by SoFi rely on Even's embedded finance marketplaces to power 100% digital personalized life insurance policy quotes for their customers, with live agent support.
Even has continued its rapid growth trajectory in 2021 by reaching over $3 billion in consumer credit issued through its API and expanding its platform to over 800 partners. Earlier this year, Even was named one of "America's Best Startup Employers: by Forbes" for 2021 and placed in the Top 50 of the 2020 Deloitte Technology Fast 500, which recognizes the fastest growing tech companies in the world.
About Even Financial
Founded in 2014, Even Financial is a B2B fintech company that is transforming the way financial institutions find and connect with consumers. As the leading search, comparison, and recommendation engine for financial services, Even seamlessly bridges financial institutions (such as SoFi) and channel partners (such as TransUnion) via its simple yet robust API and embeddable solutions. Even turns any consumer touchpoint into a comprehensive financial services marketplace with full compliance and security at scale. The company is backed by leading financial services firms and VCs, including American Express Ventures, Canaan Partners, Citi Ventures, Fidelity's F-Prime Capital, Greatpoint Ventures, Goldman Sachs, LendingClub, and MassMutual Ventures. Learn more at www.evenfinancial.com.
About Haven Life Insurance Agency
Haven Life Insurance Agency, LLC (Haven Life) is re-thinking how people financially protect the ones they love. Haven Life is committed to delivering exceptional products, delightful purchasing experiences, and meaningful moments of service to the modern life insurance customer. Haven Term is a Term Life Insurance Policy (ICC21 Haven Term in certain states, including NC) issued by C.M. Life Insurance Company (C.M. Life), Enfield, CT 06082. In New York (DTC-NY), and California (DTC-CA), and other states, it is issued by Massachusetts Mutual Life Insurance Company (MassMutual), Springfield, MA 01111-0001.
Policy and rider form numbers and features may vary by state and may not be available in all states. Haven Term is available through Haven Life Insurance Agency, LLC (Haven Life), whose agency license number in California is OK71922 and in Arkansas, 100139527. Both Haven Life and C.M. Life are wholly owned subsidiaries of MassMutual.
Please note that issuing the policy or paying its benefits depends on the applicant's insurability, based on their answers to the health questions in the application, and their truthfulness.
MassMutual and its subsidiaries C.M. Life Insurance Company and MML Bay State Life Insurance Company are rated by A.M. Best Company as A++ (Superior; Top category of 15). The rating is as of June 1, 2021 and is subject to change. MassMutual has received different ratings from other rating agencies.
Media Contact
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