By Ray Birch
ALCOA, Tenn.—Alcoa Tenn CU says it doesn’t need to offer indirect lending because its consumer loan refinance program—which gives members up to $500 cash back and a low rate—is better approach.
The program, “Got Debt,” has been in existence since 2018 and offers members and non-members a rate Aloca Tenn says is often much lower than that available from local dealers, with the added bonus of building lasting relationships with those who join the credit union just for the offer.
Darlene Swaney said that latter benefit helps address a common challenge credit unions face with consumers who become members as the result of an indirect loan, which is they never become more than a single product relationship.
“We’d much rather pay our members than pay the dealers their money,” said Swaney, who is VP of lending. “This has proven to be a very successful program. We not only get a lot of car loans with it, we get members who want to do more business with us.”
One of the big reasons Got Debt works to drive deeper relationships, according to Swaney, is the member or new member must visit the credit union to refinance and get their cash. Swaney noted that with an indirect loan, the new member may never set foot into the credit union.
“But they stop in, they see, us, they see how friendly we are, and we have the opportunity to see their financial picture when we run the credit report,” Swaney explained. “Our staff is trained to find additional products for new members that can help them. They often don’t just walk away with a car loan; they can also leave with a new credit card, for example.”
Program is Well Known
Got Debt, which can be used for any consumer loan, including RVs, boats and debt consolidation, has become very popular and well known within the communities the $368-million Alcoa Tenn serves, said Swaney. The program runs annually from April to October.
“We do a lot of debt consolidation (variable rates as low as 9.49%) with Got Debt,” Swaney said, adding that those often turn into a home equity line of credit.
Got Debt starts by giving consumers $50 for the first $5,000-$7,500 that is refinanced. Then:
- $100 for $7,500 to $19,999
- $200 for $20,000 to $29,999
- $300 for $30,000 to $39,999
- $400 for $40,000 to $49,999
- $500 for $50,000 and up
The program does not apply for existing Alcoa Tenn loans. The offer is good for a refi from another financial institution.
The program, which averages about $78 million in new loans annually, has become popular within the credit union’s communities.
“That’s a big reason why it has done so well,” said Griffin Hipple, VP of marketing and community relations. “We have people calling us asking us when are we going to run the promotion again. When it comes to car loans, our members and non-members know they can get their car financed at the dealership and then bring it to us for a better rate and then get some cash, too. We have many members come back multiple times for this offer.”
Popular Television Ads
Got Debt’s popularity is driven, as well, by the credit union’s television advertising, Hipple said. The commercials take a humorous approach and the main character in each of the spots is a credit union employee, Social Media and Marketing Associate Chuck Sayne.
“Chuck has done some acting and he likes to do the spots, which the people really like,” Hipple said.
Alcoa Tenn supports the television ads with billboard, newspaper, website, social media and radio advertising.
‘Saving a Lot of Money’
“People are just paying a lot for their cars when they get financing at the dealership,” said Hipple, noting the CU’s best rate for auto is 4.29%. “They can save money each month by refinancing with us and pick up some money. We are saving consumers a lot of money, we can even get them gap and extended warranty coverage at a lower cost. When they bring their deals in we see what the dealer is charging them for those extras and if they come in in time (less than a month after they get the loan from the dealer), we can sign them up for those coverages at the credit union and they cancel with the dealership and get a check back for what they already paid for gap or warranty.
“As far as indirect, we feel we don’t need to do that. We just let the dealers work the weekends and late at night to sell the car, and then we eventually get the financing.”