How credit unions can drive growth with unsecured lending
Inflation and a rising cost of living are weighing down today’s consumer, leading to record levels of credit card debt and contributing to increased financial stress for individuals and families across the country. According to the Federal Reserve Bank of New York, Americans currently hold $1.12 trillion in credit card debt, which is a leading cause of financial stress. Now more than ever, consumers are looking for convenient and affordable ways to reduce debt and alleviate financial anxieties.
In the digital age, consumers are increasingly looking to online providers for a solution, leaving traditional financial institutions behind. Despite community institutions’ high level of trust, their perceived lack of digital tools and consumers’ tendency to shop rates online has put these financial institutions at a disadvantage. However, this doesn’t have to be the case.
As community-based institutions with a ‘people helping people’ philosophy, credit unions have a significant opportunity to lend a helping hand to debt-laden consumers who need more than budgeting tools or general financial advice. Personal loans to help streamline debt allow members to pay off credit card debt more quickly while saving thousands of dollars in high interest rates. Not only can such an offering help members reach their goals faster and reduce financial stress, but personal loans can also bring significant value to the credit unions, helping them diversify their portfolios and increase their impact.