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A perfect storm of record-high levels of unemployment, record low interest rates and increased reliance on digital interactions is putting consumer lenders to the test like never before. According to the J.D. Power 2020 U.S. Consumer Lending Satisfaction Study released today, lenders’ ability to build trust and provide seamless, easy-to-use online tools during this heightened period of consumer anxiety will define their brands for many years to come.

“Brand image is very important to consumers, and they’re making it clear that lenders need to foster trust in the brand and the lending experience,” Jim Houston, director of consumer lending intelligence at J.D. Power said in a statement. “To accomplish that, lenders need to provide secure, easy-to-use web-based tools and focus on aligning product offerings and terms to the specific needs of their customers during this challenging period.”

Key findings of the 2020 study include:

• Repayment terms and reputation are key drivers in lender selection: The two most important variables driving the selection of a consumer lender are repayment terms and reputation of the lender. Additional factors weighing heavily on the decision process are quick application and approval processes; the ability to speak with a live person via phone; and quality of mobile and digital capabilities.
• Most customers plan to keep making payments on personal loans and HELOCs: Based on additional J.D. Power research conducted May 8-10 of this year, fewer than 15 percent of personal loan and home equity line of credit customers feel they will be unable to make their minimum monthly payments as a result of the COVID-19 pandemic. However, 42 percent say they feel the worst is yet to come in terms of the effect of the pandemic on their personal finances.
• Documents are the enemy of customer satisfaction: The ideal number of documents required to apply for and receive approval for a consumer loan is zero. Overall satisfaction with lenders is 893 (on a 1,000-point scale) when no documents are required. That score falls to 865 when one or two documents are required.
• Customers will consider alternative products: As the market for personal loans continues to gain new entrants from traditional retail, e-commerce and technology sectors, 58 percent of consumers say they did consider using alternative products for lending.