Before we really begin coding our systems, it’ll be really helpful to look at the user experience so we know what data we are gathering and what we are doing with that data. I’ve blatantly ripped these screenshots off from Lending Club. And used the logo from my securities firm for kicks.
Prosper and Lending Club are using a simple widget to get users started, so let’s do the same. We are asking for the amount, the reason (debt consolidation is one of the hotter reasons these days), and your credit score.
That image is from my trip to Costa Rica in case anyone cares – beautiful country.
The register page creates a user account, and collects all the information necessary for our system to generate a credit score and offer loans. Much of this data will later be used for identity verification, but at the moment its purpose is to reach out to our credit provider and pull a credit report. Name, Address and Date of Birth are usually the minimum required to pull that report. This could be expanded to include middle name and suffix (more details the higher the likely hood of a good match). Income is used solely for the risk / interest rate calculation, we won’t need it for pulling a credit report.
Standard offers page, it looks similar to nearly everyone else out there. Forgive the marketing parlance, but you’ve got a “hero offer” or a “lead offer” which is usually the loan amount you’re looking for. Then there are a whole list of “upsell” and “downsell” offers.
The idea for these is maybe you are asking for 10K, but they can offer you 12K at the same interest rate. Or maybe you qualify for 20K loan, the platforms want you to know that. Remember, origination fees are where the most of the money is to be made, so if they can take you to take a larger loan it’s to their benefit. Also, one loan at 20K is easier to service than two loans at 10K each.
The downsell offers are there really to make sure you take an offer. They’d prefer you not take one, but better that than nothing.
Smarter outfits will really manage their upsell and downsells to show really different offers. It doesn’t pay to show an offer for 10K, 12K, and 14K all at the same interest rate (usually). They’d rather show you the larger loan you can take at the same interest rate, then spend the space showing you alternative larger offers.
Another way to cut it might be to show offers based on a monthly payment (no online marketplaces that I’ve found allow borrowers to ask for loans but limit the monthly payment to $$ a month).
You’ve already been assessed for risk and provided an offer, so these fields are all about identity verification (OFAC), employment and income verification, and collecting a bunch of contact information in case a loan heads into collections.
Truth in Lending
This is a regulated disclosure, telling the borrower what you’re about to get into. Some of the online marketplaces have had considerable trouble displaying this correctly to users – you’d think calculating interest, origination payments, etc, would be easy enough – mostly it is, but sometimes mistakes are made.
And incorrect Truth in Lending statement must be corrected within 30 days of finding out about the problem. Additionally, once you display this to a user, you are obligated to provide them the loan at the rate offered.
After the truth in lending statement, the funnel process is mostly done. Our platform has collected enough to be able to do identity verification, the users have agreed to take a loan, we can post it online for investors (or we could invest it in ourselves). However, all the platforms do automatic deposit of loan proceeds, and debit of monthly payments. So let’s add a bank account page
That’s the funnel experience we’ll be building. There might be a whole other series on verification, automatic, document verification. Ideally after the users have passed through this funnel they are presented with a page that shows them what documents are required (Driver’s license, W2, etc) making it easy for them to get fully verified.