Loan Product Configuration: Setting Up Risk-Based Pricing (1)

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Amortization Defaults - Risk-Based Pricing


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This screen appears when the Use risk-based pricing flag is checked on the main loan product configuration screen.  This is also accessed by selecting "General Loan Information" on the Loan Product Configuration Options screen and using Enter until you come to this screen.

This screen is used to define risk-based pricing for this loan product. CU*BASE Risk-Based Lending lets you automatically price member loans according to the level of risk associated with granting and servicing those loans.

SEE ALSO: Risk-Based Pricing for Loans Overview

The list at the bottom of the screen shows all of the pricing groups already created for this loan category, one group for each Paper Grade your credit union receives from your credit bureau. A special group can also be set up for members with no Paper Grade, in cases where a score was recorded but a grade was not. For example, if your credit bureau delivers one of 5 different Paper Grades (such as A through E or 1 through 5), you would set up a total of 6 groups, one each for A, B, C, D, and E, and another for “blank” to be used for members with no grade recorded. Up to 36 different tiers (with 8 rates each) can be configured.

Special Note Regarding 247 Lender: If your credit union uses 247 Lender for automated decision modeling, be aware that the system currently uses only a single tier of risk-based prices (up to 8 credit score ranges and corresponding rates can be set up in that tier). The Level must be set to 0 (although a level of 1 will work as long as you do not have any other levels configured). Also remember that score ranges are set up using actual credit scores, not the special SAVANT score numbering scheme. For special instructions, refer to the Configuring 247 Lender and the Approval Matrix booklet.

Special Note on the "Refinance Triggers Feature that highlights loan opportunities for lending on the Loan Application Debts screen based on trade line associations:  The rates configured on this screen are used if the product configured for comparison uses risk-based pricing. Learn more about this feature on the Configure Products for Refi Triggers topic.




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