loan application improvements

Give declined applicants a path to approval

worked with:

  • product managers
  • product marketing
  • engineers

produced:

  • workflow diagrams
  • wireframes
  • mockups

context

Since the loan application process is so crucial to the GoodLeap’s business, we’re always looking for ways to improve it. This case study outlines two separate but related initiatives - one to provide more detail when an applicant is declined, and another to make it easier to add a co-borrower to an application.

Phase 1: Help applicants understand why they were declined and what they can do to try to get approved.

The existing application process didn’t do much to explain why an applicant was declined, and gave no advice on what they might do about it.

The only way for an applicant to get more information about why they were declined was to call GoodLeap or wait for the adverse action notice to come in the mail.

The Business Development (BD) team reported many of the calls they receive are from sales reps who want to know why their applicant was declined.

The Customer First Advocate (CFA) team also receives a large volume of these calls a week.

the opportunity

Increase the percentage of declined applicants who reapply by sharing more information about what they can do to try to get approved

Reduce the number of calls the BD and CFA teams receive by providing more information about why a borrower was declined

the process

Discovery

There are many reasons that an applicant can be declined for a loan. As a starting point, the product manager and I reviewed all of the decline reasons and the existing scripts that our CFA team uses when talking with sales reps and borrowers. We learned that there are over a dozen decline reasons, and for each reason, the CFA team has borrower-facing and sales rep-facing scripts. This is because certain details could only be disclosed to the borrower, but in many cases a sales rep calls on their behalf.

Understanding the decline reasons wasn’t enough, though. We also needed to be able to tell applicants what they could do to try to get approved. After studying the decline reason scripts and reviewing with CFA, we realized that the recommendations could be boiled down to one of two next steps:

In most scenarios, adding a co-borrower is an applicant’s best chance to get approved.

In some cases, an applicant can’t be approved, and the only option is for another homeowner on the title to apply.

Design

The UI updates for this project centered around the loan decision screen. Since the language being used on this screen is so crucial, I spent a significant amount of time with the product manager and product marketing to repurposing CFA’s scripts to be used in the UI.

Key considerations:

  • The loan decision screen is visible to both borrowers and sales reps, so we needed to be conscious of what information we shared.
  • We wanted to provide enough information about why the borrower was declined so they wouldn’t need to call in for more detail.
  • To improve reapplication rates, the CTA needed to be clear and obvious.

I created multiple options to explore how we might show the decline reason. One option was to show it directly on the page by default.

Another, more conservative approach, was to make the decline reason available, but not show the details by default.

Knowing that this screen is viewed by both borrowers and sales reps, my initial proposal was to share just enough information that the borrower could understand why they were declined, but focus on encouraging them to reapply with a co-borrower. With this in mind, we reworked the sales rep script to be addressed to the borrower (since they are the primary audience).

However, after an initial review with stakeholders, we learned that their main priority was minimizing calls to BD and CFA. With this new clarity, the product manager and I reworked our proposed copy to include more detail and opted to include it on the decision screen by default.

There were also a couple of variables that needed to be accounted for in the new designs. An application could be for a single borrower, or a borrower and co-borrower. And an application could be declined for a single reason, or for multiple reasons.

In addition to explaining why the borrower was declined, we also made it easier to add a co-borrower directly from the decision screen. The only way to add a co-borrower with the existing application process was to start a brand new application. This meant the original applicant had to re-enter all of the information they just submitted, and then provide the co-borrower’s information. By providing the option to add a co-borrower from the decision screen, we could preserve the original applicant’s information and only require the additional co-borrower’s information.

impact

After release, the post-decline re-submission rate went up 20%

The CTAs to encourage re-submission saw a 12% engagement, with most users who started completing the second application.

Phase 2: Make it easier to add a co-borrower... later.

Even with explaining why a borrower was declined and recommending what they might do about it, we still saw a shortcoming in the experience for declined applicants. They could only add a co-borrower if the co-borrower happened to be present and able to complete the form. The next initiative focused on giving applicants a way to add a co-borrower asynchronously. Allowing an applicant to email the co-borrower’s portion of the form gives them the ability to share it with someone even if they aren’t present or able to complete it in the moment.

the opportunity

Increase the percentage of declined applicants who reapply by letting them email the form to a co-borrower

Increase approval rates for borrowers who were initially declined

the process

I made a workflow diagram to define when and how a co-borrower could be added to an application.

Once the workflow was agreed to, I created wireframes to better demonstrate the experience. This also helped identify new screens that would be needed and updates to the existing UI.

In outlining the wireframes, I identified an area where we could improve the user's experience. We had an existing pattern for sales reps to email an application. But since this would likely be an unfamiliar process for borrowers, I created a few options for a new screen we were creating to allow the borrower to email the application to a co-borrower.

I also needed to consider the borrower's experience when the co-borrower they add is declined. We needed to send them an email informing them of the decline, and ideally give them the option to try adding a different co-borrower.

Note: At the time of writing this, the second phase of work has not been released, so I can't speak to the impact it will have.