WASHINGTON-PAHO/WHO FCU here continues to see success with its annual holiday loan promo, this year offering as much as $9,000 at 0.99% for one year, and booking more than 110 loans since Nov. 1.

The 4,700-member, $195-million credit union offers the product each year, though this year's rate is especially low due to the historic low rate environment, explained Marella Nardotti, director of marketing and administrative services.

"We're not doing this loan to make money," said Nardotti. "This is basically a product to help our members. We offer this product every year and it's a great rate every year for a 12-month term, and this year we decided to make it more attractive...We know we're not really going to make money on it, but it's a time of year when people need money, and we're a credit union and we're here to help our members."

PAHO/WHO uses its own internal criteria for underwriting rather than relying solely on credit scores. Nardotti would not reveal specifics of the underwriting for the holiday loan, but said that the credit union factors in employment, job tenure and debt-to-income ratio in determining how much members are eligible for. According to the CU's website, members with a full-time job are eligible for loans up to 35% of their net annual income.


Not Difficult To Qualify

"It's not a difficult loan to qualify for," said Nardotti. "As long as you're not going beyond the lending parameters that we offer in regards to your income to debt ratio, then you qualify."

All approved applicants receive the 0.99% rate, but not everyone receives the full $9,000. Nardotti said that said that the average loan right now is around $6,500. The CU's website notes that payments for those who take out the full $9,000 loan will be $754.02 per month.

The loan is being promoted via e-mail blasts, direct mail postcards, web banners and in-branch signage. The credit union will offer the loan until the end of January, and Nardotti said that there is no cap on the number of loans that PAHO/WHO will issue. The CU is not putting any particular focus on cross-selling, but it puts a heavy focus on credit cards and auto lending all year long.

Last year PAHO/WHO booked 188 holiday loans for a total of $890,000.

"We've been running this program for years and years, and members know the holiday loan is coming," said Nardotti. "It's just a matter of the rate and what the maximum amount a member can borrow is going to be."

According to its most September 2012 Call Report, PAHO/WHO FCU has 3,156 loans on its books totaling $77.9 million, with most of that total coming from first mortgage loans. The CU finished 2011 with 3,101 loans totaling $81.9 million. It is currently "Well Capitalized" with a Net Worth Ratio of 17.94.

More info: https://www.pahofcu.org/loans/personal

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