Understanding Loan Pricing: More Than Just Matching the Competition

Today's pricing environment is very volatile, after the Federal Reserve had been raising rates over the last two years, then with rates heading down in mid-2019. This creates several immediate issues in terms of dealing with customers, including attempts by competing lenders to take some of your best borrowers with unusual or very low interest rate quotes with extended fixed-rate periods. Too often, your lenders and management explain the competing offer as just "desperation" or crazy. By not knowing how the competitor derived the offer, your bank ends up just meeting the competition.

There is a better approach, and this program provide several key steps to develop a strategy for combating the competing offers: (1) Providing options in your bank's rate quotes, (2) being proactive in determining "at risk" borrowers before the competition finds them, and (3) scouting the competition.

Covered Topics:

  • Overview of Today's Pricing Environment
  • Rate Changes
  • Options for your Customers
  • Scouting the Competition
  • Key Elements of Loan Profitability
  • Battling the "Uncertainty Monster"