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Lowering interest rate on existing loans

  • 1.  Lowering interest rate on existing loans

    Posted 25 days ago
    This is really a two part question.

    1.  ​We have members who come back to us after a loan was disbursed (vehicle, unsecured) after our rates have lowered , wanting a lower rate on their existing loan.


    2.  We also have members come back stating their credit scores have increased and wanting to see about getting a better rate due to this.  We do Risk Based Pricing, and their rate is based on their credit score.

    I am looking for guidance on how to handle these situations.

    What do you do if your members come to you with these questions.

    Thank you for your input.

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    [Rhonda] [Schademann]
    [AVP Lending]
    [Nebraska Energy Federal CU]
    [Columbus] [NE]
    [P402-563-5599]
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  • 2.  RE: Lowering interest rate on existing loans

    Posted 24 days ago

    Rhonda,

    If a member comes back and wants to lower their rate due to market rates dropping, we do it.  The alternative of not doing it is they go somewhere else.  I would rather lose a piece of the income than all of it. 


    As for members who say there score has increased, same applies but we have a 6 month wait on this scenario. So, if we do a loan today, we will not check the score and adjust for at least 6 months. 


    Heath



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    Heath Harrell
    CEO
    Guardian CU
    Montgomery AL
    334.241.8766
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