Partner Solutions - Demand
The $1.9 trillion American Rescue Plan Act (signed into law in March 2021) implemented several initiatives aimed at helping Americans recover from financial difficulties related to the COVID-19 pandemic. The stimulus package included $1,400 direct relief payments, an extension of weekly unemployment benefits through September 2021, and an advance on Child Tax Credit payments, which were also expanded to as high as $3,600 annually per child.
With the advance and expanded Child Tax Credit payments anticipated to hit bank accounts on July 15th, and every mid-month point through December (the remaining half is claimed when families file their 2021 tax returns), what should Even’s partners expect with regard to changes in consumer intent? And what can be done to mitigate any potential losses?
What to Expect
Even does not anticipate a drastic impact to consumer demand for the following reasons:
Fewer taxpayers qualify for this benefit than those that did for the $1,400 stimulus checks. Credit only available to individuals with annual income of up to $112,500 and joint filers of up to $150,000 per year, for children age 17 and under.
The payments are an advance on tax credits; qualified taxpayers may opt out of the monthly advance, choosing to receive the lump sum during the 2021 tax season (to fund large purchases or reduce tax liabilities). The plan increases the yearly per-child credit from $2,000 to a maximum of $3,600; the effective increase is $1,600 per child per year at most.
As a result, the impact will be felt most with family-oriented borrowers, especially those who meet all the criteria for the expanded Child Tax Credit.
How to Supplement Monetization Rates
You may not be able to entice families with extra cash flow to take out new loans; you can, however, expand your content and offerings to cater to audiences with stronger demand, in order to bolster your revenues. Here is what Even suggests:
Focus on Student Loan Refinancing
Even has seven SLR partners ready to help consumers refinance loans, including full credit spectrum coverage after onboarding additional FI partners in Q1 and Q2 of 2021.
Consumers with private loans have refinanced in large volumes during 2020 (and into 2021) to take advantage of the historically-low federal reserve interest rate. The Fed signaled recently that rates will remain between 0.00% and 0.25%, with little probability of increase before 2023.
Federal student loan forbearance ends on Oct. 1st, 2021, and analysts do not expect sweeping student loan forgiveness from the current administration before then. We expect a large influx of consumers refinancing federal loans to take advantage of lower interest rates.
Ask your partner manager how to prepare today for the anticipated volume in student loan refinancing.
Consider Auto Loan Refinancing
This offering is new to the Even platform. We are ready to launch with beta partners willing to help us build this marketplace in tandem with our existing financial products and services.
Indicate your interest to your partner manager to find out next steps.
Home Equity Line of Credit product (HELOC)
If your audience includes homeowners, let us know. We are working to seize the HELOC opportunity with our existing lenders’ offerings, and are inquiring among our relevant channel partners to prioritize this effort.
Consumer demand will continue to fluctuate based on macroeconomic conditions. That is why it’s imperative to maintain growth using Even’s embedded finance marketplace, which provides real-time, personalized offers across a variety of products to best meet your consumers’ needs.
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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