Financial Health
Helping Borrowers Repay on Time Through Smarter Loan Design
The Problem
Peoples Advantage Federal Credit Union created Fast Cash to give members a fast, affordable alternative to high-cost credit. The program offers up to $2,000 with no credit score check and a decision in 60 seconds. But borrowers were missing payments, triggering late fees, debit card freezes, and credit score damage, while the Credit Union dealt with rising delinquency costs.
Our Solution
We redesigned the Fast Cash loan application to make repayment terms, due dates, and penalties clearer from the start. We then added strategically timed text message reminders before and after payment due dates to help borrowers pay on time or seek support when they couldn't.
The Results
After redesigning the application to clarify repayment terms, due dates, and the real cost of missed payments, delinquent Fast Cash balances dropped roughly 20% over three months.
The addition of four strategically timed text messages, to remind borrowers before payments were due and prompt them to seek support when they fell behind, drove a 19% drop in delinquent balances.
The reminders delivered results across the board:
-
↓ 8%Â
fewer borrowers past due on payments each day
-
4–5
days to repay when borrowers did fall behind, which helped them catch up significantly faster
-
↓ 11%
fewer borrowers paid late fees, lost debit card access, or took hits to their credit scores
The amount of delinquent balances fell 24% after text reminders were implemented. For the average past due borrower, that meant not paying $15 for each late payment occurence.
The Credit Union then extended the program across their entire loan portfolio – and saw over three months, they saw $1.3 million fewer dollars in delinquency each month.
