Personalised loan assessments for a post-COVID world

Every loan application mortgage advisors deal with is different. Every person has a story to tell and by the time they come to a non-bank lender there is a reason their loan application won’t work at the bank.

Often, someone has just had some bad luck. Other times it is because the banks don’t have the ability to personally look at the individual situation, and in a post-COVID world there are definitely some unique situations out there.

It might be as simple as the person has had a change in income in the last 12 months, or they have a low credit score for a reason that has been resolved.

If we can, we love to help them get back up again and, on their way back to the bank in 12 months or so. We back loans where we know that after a year of lending from us people will be able to go to a major bank.

We pride ourselves at assessing applications. We assess it quickly (offer within 24 hours) and have an attitude of how can we make the deal work rather than how can’t we.

Unfortunately, many lenders use “no” as their starting position on deals. They don’t look at underlying issues or the opportunity this could create for the borrower to get ahead.

First question we ask is, “why is this person not with a bank?” The banks have very competitive rates. But their appetite fluctuates and right now their appetite is shrinking.

With some deals it’s obvious why they’re not with the bank and that’s OK. We then try to put the lending jigsaw together to understand why the potential borrowers are needing our services and what their plan is to get back on their feet and back to the bank.

Another big question we ask is, “will this loan put the borrower into a better position?”

We had a borrower whose business had failed through no fault of their own, they were paying two mortgages on their house and finance on a work asset they didn’t own any more. At that stage they were paying the loan back to three lenders at almost $8,000 a month and were seriously struggling.

This person came to Southern Cross Partners, we consolidated the debt and they’re now doing an interest only loan at just over $2,500 a month. They’ll be back on their feet by in about a year and back to the bank.

In a world where it’s easy to say no, we find it easier to look at the full story and make sure we are doing best for borrowers.