On average, online application conversion rates are low. According to Experian, the banking industry only sees a 3% conversion rate. 97% of all their potential applicants fail to complete the online form and end up falling into the already large pile of lost business. Considering that the majority of people today choose to apply for loans and credit cards online, that percentage may seem daunting. So we've compiled a list of 6 of the best tips experience and research could find to help your customers complete their online loan applications and to help you generate more online lending business.
1. Optimize for mobile.
In 2018, 5.1B people will access the internet via a smart device and 52.2% of all web traffic will come from mobile. If you're not making your website and online applications mobile friendly you are going to be missing out on a tremendous opportunity. The good news is that this is a more manageable endeavor than you might have realized. First: get on your website as if you were a potential customer and ask yourself a few questions:
Are the buttons (especially the application submit button) and the form fields big enough? Your consumers shouldn't have to guess where to tap.
How much typing is required? Minimize typing by using dropdowns, checkboxes, radio buttons, and auto-selected answers. Trust us; your customers will thank you.
Are these questions clear and concise? While this is important regardless of device, it is especially important with mobile devices because they don't have as much screen realestate as a desktop computer. You don't have the luxury of being able to use three lines to explain each question. Be clear and concise and don't leave anything up to interpretation.
Are there tooltips? If a complicated question is necessary then you will need to have a clearly indicated tooltip that can be tapped to provide more explanation. This is crucial.
2. Pre-populate fields when you can.
Your consumers are repeatedly asked to enter personal information like their name, birthdate, address etc... Make it easier for them to do this by pre-populating the info you may already have on file or info you can access via an API like Experian's Instant Form Fill API. Many forms ask users to input their entire address including zip and state each time they fill out a form, but thanks to the Google Place Autocomplete Form parts of their address can be automatically completed after only a few inputs have been added (like zip code.) This will not only save your potential consumer time, but it also removes unnecessary form friction that is currently causing application abandonment.
3. Keep it short and sweet.
Every loan application has a certain number of fields that the user must fill out in order to make a proper lending decision. You'll always need information like name, address and loan amount. However, depending on the loan type and the amount of money being requested, asking for more info probably isn't going to help you make an underwriting decision.
Unfortunately, a lot of lenders ask and even require that borrowers input more info than is necessary when applying for a loan. When dealing with a small dollar personal loan you don't need to have the person's last five jobs or four references or even the address of where they lived three years ago. Keep your application short and to the point so you don't lose your potential borrower to form abandonment. Remove the friction and make it easy for you consumers to apply and reapply for your installment loans.
4. Break the form into multiple steps.
Filling out a loan application is a daunting task. Asking anyone for money, even a friend, can be a hard thing to do. Make it a more manageable task by breaking the application into visual steps with a clearly labeled progress bar, a back button and next button.
Here are a few reasons why multiple step applications work:
- Multi-step forms reduce psychological friction. If a potential borrower sees that they have to fill out 20 fields, they may become overwhelmed.
- With fewer fields and multiple steps, the first impression of your application is less overwhelming. When your application is broken down into steps, potential customers will see two inputs and a few steps that they have to complete to apply for the loan.
- The progress bars encourage users to complete the form and gamify the process by giving the borrower a sense of accomplishment as they pass through each step.
- You can ask ‘sensitive’ questions (e.g., email address, last 4 of social security number) on the final step when users have more ‘skin in the game’ from filling out previous steps.
Your applicant should not only be able to see a few questions at any given time, but know exactly how much of the form they have completed and how much of the form they have left.
5. Allow applicants to save their progress.
Your loan application needs to have an omnichannel lending experience. The days of a user sitting down at their computer and completing an application in one sitting are long gone. Allow your consumers to create an account and seamlessly move between their phone, computer and tablet while they are completing their application. Your form abandonment rates will drop and your company's accessibility will go up. The reason your new customers are choosing to fill out an online application instead of going into your branch is for an optimal experience. So make it optimal.
6. Add the human touch.
Out of 100 lenders websites that were audited only 11 offered some form of live chat and none of them offered 24/7 support. Why, when your potential customers can apply for a loan 24 hours a day and 7 days a week? Think of it this way, would you allow your consumers to come into one of your branches to fill out an application and not offer to assist them or at a minimum be available to answer their questions? This is exactly what most lenders are doing to their online users. A solid remedy to this is to have 24/7 live chat on your website. This may sound expensive and complicated, but thanks to companies like BorrowerHQ, it isn't. If your borrowers know they can get their questions and concerns answered in real time they will be more likely to complete their application.
It's 2018 and 5.1 billion people are are browsing the internet via their smart devices. That's a vast number of people that potentially want to borrow from you. So it is aboslutely in your best interest to make your online applications as customer friendly as possible. Take the time to track, test and optimize your loan applications. By doing so, you will encourage your potential borrowers to take the time to finish filling out their forms. It's a win, win.