Who Are The Millennials?
The Millennial generation is the largest generational segment in United States history, it is also the most indebted generation in history. 36% of Millennials currently carry student loan debt and over half of those feel that their student loans are preventing them from reaching future goals.
One out of every ten Millennials lives at home with their parents, 15% of those with a student loan have already been turned down for another loan, and 27% of individuals with student loans just completely avoid applying for another loan altogether.
This has created what is now known as “The Millennial Lending Crisis.” Over 75 million potential consumers, most of whom are already in debt, and many of whom are putting off making big purchases to avoid going into more debt.
Raddon Financial Group did a research report looking into this issue. They wanted to figure out how lenders and other credit companies could continue to flourish during this crisis. Raddon says that lending opportunities may become harder to come by in the future. However, they recommend using different outreach techniques to draw Millennials in.
What Do They Want?
Based on Raddon’s research, Millennials are very interested in keeping up with their credit scores and would like to be alerted and counseled about their scores:
- 54% are interested in email alerts when their credit score changes
- 57% are interested in having their credit score included on monthly statements
- 51% are interested in an online credit score simulator to help manage their credit profile
- 37% are interested in one-on-one credit counseling
Credit monitoring is a service that millennials want and will react positively to. It will also help you to avoid underwriting issues. These kinds of monitoring programs can be extended to include courses that help provide basic understanding about different types of loans (application evaluations, etc.) In general, offering education to your clients will appeal to Millennials.
Another thing to keep in mind when trying to lend to Millennials is that they are apart of the digital generation. They grew up with internet, social media, and smartphones. They expect to be able to accomplish everything online and in a quick manner. They will appreciate and gravitate towards any company that allows them to do everything via their mobile phones.
However, many of them are new to borrowing money for purchases outside of schooling. They might feel intimidated or out of their league. While it is very valuable to have everything available to them through easy online access, it is just as valuable to provide them with “guides” throughout their lending process; actual people that they can form relationships with and trust to help them manage their loans.
How to Win Them Over...
Millennials are business minded. They will look at lending companies the same way they look at any other business. They want convenience, fast results, mobility, and incredible customer service throughout the life of their loan. GOLDPoint System’s servicing capabilities make it possible for you to provide round-the-clock service with flexibility that Millennials will be drawn to and feel comfortable with.
The Millennial Lending Crisis is real but it is not something to be afraid of. You might need to make some changes to your business model, but you can accommodate for millennials. And, after all, isn’t that what we’ve always been doing?