Overview: Flex Loans

Flex Loan allow members to request a change in the term resulting in a payment change on their loan for configured products.  Let’s look at how this feature works “in a nutshell.”

Additional Resources

• Flex Loans (My Loans/My Way) booklet

About this Feature

With Flex Loans, members click “Modify My Loan” in It’s Me 247 desktop banking to request a modification to an existing loan, to either lower their monthly payment or to pay off the loan more quickly.  The feature puts decision-making power (within the parameters your credit union sets) in your members’ hands to let them make the changes when they need them.  Your credit union can make this a fully self-service feature or elect to have your lending team work the approvals.

All loan modifications appear in the LOS lending queue (Tool #2) on a “Modifications” tab. There you will know to send any needed paperwork, approve additional modifications that fail your filter and deny modifications as needed.

Interested in assistance with activation?  Check out the CU*Answers Store at https://store.cuanswers.com/product/flex-loans/

Configuring Flex Loans at the Loan Category Level

Currently Flex Loans are only available for closed end loans (MEMBER5 loans.).  Only loan categories with a payment frequency of monthly can use Flex Loans.

Flex Loans are configured from the second loan category configuration screen.

The first Flex Loans configuration screen allows you to configure your Flex Loan product.  It controls if Flex Loans are allowed for the category, the minimum/maximum payment dollar change amount, the minimum and maximum number of payments allowed after modification, and the exclusions.  This screen also allows you to charge a different fee for the request and auto-approval (if configured). The second Flex Loans configuration screen lets you to enter the text the member sees in online banking.  

Configuring Flex Loans as a Self Service Product

Your credit union can make Flex Loans a self-service feature by activating auto approvals.   If a member’s request passes your credit union exclusions, their loan payment and term updated automatically.  Members’ requests that fail your exclusions are sent to the LOS loan queue (Tool #2) to be worked.  Loan officers see both the auto approved and failed Flex Loan requests in the loan queue.  For auto approved requests, they can complete the request and send any needed paperwork.  For failed requests, they can review them, as discussed below.

Configuring Flex Loans to Always Be Reviewed

Your credit union can elect to review all Flex Loan requests.  This is a good option for credit unions with lower risk tolerance, or for credit unions that want to become more comfortable with how requests might be approved before activating the auto-approval feature.  

Your loan officer works all requests from the LOS loan queue (Tool #2).  Indicators in the loan queue show if this request has failed or passed the exclusions.  See "What does the status mean for loan modification requests" below.

The Member Experience

Flex Loan requests are currently only available in standard It’s Me 247.  Flex Loan requests via Mobile Banking are currently not available.

Members access the Flex Loans’ Loan Modification window from either the Account Summary or Loan Detail screens.  After reading the credit union’s explanation of the product (from the Flex Loans configuration), members dynamically move their loan payment and term within the range allowed by the configuration.  Members select an account to cover the fee and submitting their request.  Then the member’s loan is either auto approved (and the loan is updated) or the request is sent to the loan queue.  According to the result of their Flex Loan request, members are presented appropriate messaging configured by the credit union.

Working Loan Modifications in the CU*BASE LOS Loan Queue

Loan officers can work Flex Loans request in the LOS loan queue (Tool #2) in a special “Modifications” tab.  

If your credit union has activated the auto-approval feature, approved requests will still appear in the queue so your loan officers can complete the request, for example sending any forms or needed paperwork.  Requests that fail the exclusions will appear in the queue to be approved or denied.

If you have set your credit union up to review every request, your loan officers will go to the queue to approve or deny requests. Helpful messaging on the modification request screen will alert your loan officers if the request has passed or failed your exclusions.

Question: What does the status mean for loan modification requests in the Loan Application screen (Tool #2)?

Answer:

Below is an explanation of the meaning of the status column for the loan modification requests on the LOS loan queue (Tool #2).  What the status means and which statuses are shown depends on whether auto approvals have been activated.

If auto-approvals are activated:  

• Completed.  This means that the request was approved with the auto approval process.  The loan officer can use Member Inquiry from the loan queue to see the Tracker conversation created.  (This requires that your credit union configured a Tracker and Memo Type in your configuration.)  This information is also in the detail of the modification request.  This also can mean that a loan officer approve the loan request. Refer to the loan request detail to see the reason it was completed.  With either situation the loan officer can then work this processed request following the policies and procedures of your credit union, for example sending the appropriate forms to the member. 

• blank (no decision).  This means that the request failed the exceptions.  The detail of the loan modification will show the exclusions failed.  The loan officer can either elect to approve this request or deny it. 

• Denied.  This means that the request that was blank was denied by a loan officer.

• Completed.  This means that the request that was blank was approved by a loan officer.

If auto-approvals are not activated:

• blank (no decision).  This means that the request failed the exceptions.  The detail of the loan modification (which can be seen when you use the action ‘Work With Req’)  will show the exclusions failed.  The loan officer can either elect to approve this request or deny it. 

• Qualified.  This means that the request passed the exceptions, but since auto approvals are not activated, the loan officer still needs to approve the request.

• Denied.  This means that the request was denied by a loan officer.

• Completed.  This means that the request was approved by a loan officer.

Reporting

All requests remain in the queue for later research.  Additionally, table (file) and column (field) changes occur at different stages of the request to allow for further investigation.  Refer to the Flex Loans (My Loans/My Way) booklet for more details.