Other than bargain-basement pricing, there is probably no better way to impress Web users than to promise an immediate response to their credit application. Even though most major financial institutions have the technology to make instant decisions, only two banks, and a finance company currently offer this feature.

The industry reluctance to grant instant credit online is understandable, and maybe even desirable from a public-policy standpoint, especially given the current high levels of U.S. credit card losses. But real-time credit approval is inevitable, so you might as well begin experimenting with it as soon as possible. If done correctly, under-writing standards needn’t be compromised.

But there is more to being a speedy loan originator than just how fast the loan is approved. It also matters how fast users can figure out your pricing; how fast they can fill out the form; how fast they get the money; how fast their questions are answered by a real person, etc. Refer to the chart on the facing page for ways to boost your loan origination operation to “Internet speed.”

Adding Zip to Loan Originations

• Fast loading: Make sure the loan application form loads quickly and uses just basic HTML. No frames, no Java, etc.

• Easy-to-find: Make the loan application easy to find on your Web…ideally with a link on your first page such as CoreStates www.corestates.com . Develop a direct link such as http://loans.yourbank.com  that shoots users directly to the loan center.

• Easy-to-use: Make sure the user can figure out how to fill out the loan application within 30 seconds of viewing it. Do usability testing in a computer lab.

• Easy-to-understand: You must present the required disclosures and legal agreements. Just make sure they don’t overly gum up the selling process. Your loan product should be understandable in just a single screen covering rates, fees, term, variable rate indices, and the exact nature of the approval process.

• Easy-to-complete: Take a hint from the ubiquitous preapproved credit card “acceptance form.” The fewer boxes to fill in, the higher the response rate. The same logic holds true on the Web, though you can build your application in steps to squeeze in a few more questions. And try to avoid having users input actual account numbers. If they have to leave their terminals to rummage through file drawers, you’re going to lose them.

• “Over” communicate: E-mail is free. Use it. Send a minimum of three e-mails to each applicant thanking them for their business, reassuring them that the loan has been received and looks to be in good order, and explaining exactly what happens next. The e-mail communication process can be entirely automated. Send the first e-mail immediately upon receipt of the completed application, the second a few hours later, and the third 24 hours later (continue e-mailing every 24 hours until the final loan decision is made)

• Real-time sales support: People have questions and need reassurances before laying out their financial life on an Internet form. Make sure your toll-free number is visible by the application. Even better, consider offering real-time customer service via “private chat mode” (e.g., customer types in questions, loan rep types back answers).

• Get the money to the applicant fast. Once the loan is closed, make the funds available immediately on your Web, sending a notification of funds availability via e-mail and regular mail. At the Web site include online options for transferring the funds to third parties using online bill payment, balance transfer, wire transfer, or money order. Also offer options for shipping the money directly to the applicant via regular mail, Federal Express, or wire.

Maximize Search Engine Exposure

According to the Georgia Tech GVU VII Internet User Survey (4/97), 87% of Web users rely on search engines to find information. To ensure you’re listed high up on the results page, make sure you’ve included the important keywords in your Web pages (see Memo to Webmaster on p. 2). But just getting picked up in the search results isn’t enough to make the sale. You only have a few seconds to make your pitch. On the Internet, it’s easy to comparison shop, so to stay in the running, you need to clearly and quickly state your features and benefits. And if you have a unique selling proposition, incorporate it into the title of the Web page so that the search engines pick it up (e.g., “biggest lender in Hoboken” or “5-minute equity loan approval”). Make sure you cover these loan attributes:

• maximum LTV

• maximum repayment schedule

• online/other access methods

• speed of your online application process

• maximum line sizes

• maximum loan payment ratios

• initial, minimum and maximum rate/APR

• online/telephone customer service

• other benefits

First Internet Savings & Loan¹

Cherry-Picker’s Home Equity Loan

• 125% LTV home equity secured revolving lines of credit
• online mini-application or print-and-mail
• five-minute conditional approval and line size determination
• $199 loan fee due at closing (approved loans only)
• variable rate with spread, minimum, and maximum rates dependent on credit quality and promotional factors, but averaging prime plus 3%
• portable loan (move to new home, or refi with minimal paperwork, subject to approval)
• unlimited online check-writing
• paper checks (if desired)
• online wire transfers
• online money orders
• online account balance and transaction history
• online skip payment request