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March 2024

Refining the consumer loan experience                  

Last month, we talked about gathering consumer insights to better understand your customers’ needs and preferences, with the goal of improving their user experience. In the same spirit, we did a little research of our own…

We surveyed 2,000 consumers about, among other things, their current and desired loan experiences. The findings provide an interesting challenge for those offering consumer loans.

We found that 38 percent of consumers took out a loan digitally through an online-only institution, such as SoFi, Upstart, Best Egg, or Lending Club. However, nearly 60 percent took out a loan in-person with an agent, with 21 percent using digital forms, and 38 percent using paper-based forms.

While we found that digital processes are preferred overall, it’s clear that people still like seeing a friendly face when applying for a loan. So, how can you adapt to enable the desire for a self-service application, while still providing the friendly face?

What we know

  • Convenience is key
  • Consumers want to be educated on what they are purchasing
  • Feeling in control removes the pressure of making a quick decision
  • They want an easy, step-by-step process

Consumers who applied digitally appreciated going through the process on their own time without having to travel to a physical branch. They also liked the ability to review everything without feeling pressure from an agent to make a decision. Overall, a clear, easy-to-navigate website with explanations throughout was critical for a positive experience when applying digitally.

Those applying in-person appreciated the ability to ask questions and get immediate answers. They also felt it was important to have a step-by-step explanation to make sure the terms were clear and that they were making an informed decision. Connecting with someone helped them feel more confident about their decision.

Regardless of in-person or online, positive experiences stem from an easy-to-navigate step-by-step process. Consumers expect the purchasing experience to be efficient, seamless and user-friendly.

Ultimately, whether the consumer had previously taken out loans in-person or digitally, almost half of the consumers surveyed felt that taking out a loan digitally would be ideal for future loan needs – with convenience and efficiency as the leading reasons.

So, what do we do now?

The consumer landscape and expectations have changed rapidly, making it evident that there are still varying preferences. Understanding those preferences is the first step to creating the ideal experience for your consumers. The survey findings are helpful in defining what an experience could look like that satisfies both the consumer’s desire for a self-service, digital-only application process, while still providing all the positives of the in-person experience.

Building out an easy-to-use, informative digital process and platform with opportunities to connect with a live person via chat or a quick phone call seems like the “perfect” recipe. It also seems a little daunting – where do we even begin?

Embrace the journey 

Redefining the borrower experience is a journey – continually evolving and understanding that one size does not fit all. Building a strong team and identifying the right partners can help you define an ideal consumer experience that is simple, scalable and will make your members feel confident about continuing to do business with you. Making meaningful changes that will improve and personalize your borrowers’ experiences will not only show that you understand their needs, but that they are valued, and you are committed to continuing to earn their business.

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Unless otherwise noted, all statics are from the Securian Financial proprietary survey conducted in February 2024.

DOFU 3-2024