Article – Holiday Loan

The holidays will be here before you know it, and between parties, gifts and travel, many of your members may find themselves in a financial bind. As holiday spending continues to climb each year, now is the time to ensure your members know they can turn to you when seasonal expenses start to add up. Through your partnership with QCash, it’s easy to offer a holiday loan that enables members to quickly access funds when they need it most.

Not sure where to start? Using data from QCash clients who have had successful holiday campaigns, we’ve created an easy-to-follow roadmap that will help you set up your Holiday Loan for success!

Step 1: Decide on the Details

What should the minimum loan amount be? What interest rate makes sense? Should the term be tiered based on loan amount? Take the guesswork out of questions like these by seeing what other QCash clients have done.

What loan type should we choose? The majority of credit unions package their Holiday Loan as a Specialty Loan, but many offer it as a Pre-Approved Loan. Both are viable options depending on your credit union’s goals and members’ needs.

What should the interest rate be? The median interest rate for a QCash holiday loan is 12.95%, with loans ranging from 0% to 28%.

What about an application or origination fee? Many credit unions don’t charge an application or origination fee for their holiday loans, but for those that do, the median fee is $20 and $35, respectively. How do I decide on the details of the loan term?

We have seen successful holiday loan campaigns with minimums of three months and maximums of 12 months, with most having a fixed term of 12 months. Most Holiday Loans are not offered beyond a 12-month term. We recommend setting the product interest rate at 11 months or lower, so the product is paid off before the next holiday season.

What is the minimum and maximum loan we should offer? The most common minimum amount set by our credit union clients is $500 and the most common maximum is $2,000, although some have started as low as $200 and gone as high as $5,000. Keep the demographics and needs of your membership in mind when determining loan amounts.

What should the member’s deposit history look like to qualify? The most common aggregate deposit total history period is 61 days and the most common percent of aggregate deposit total history period is 40% of the loan amount.

Please Note: The interest rate, application fee and origination fee set for your loan should be based on regulatory allowances applicable to your credit union.

For a detailed breakdown of how other credit unions are structuring their QCash holiday loans, check out this resource.

Step 2: Choose a Name

Whether it’s simple or snazzy, a well-chosen name is one of the most important parts of your marketing efforts. Your product name is often the first interaction a member has with your Holiday Loan, and it directly impacts adoption. The most effective names clearly communicate the core value: fast, convenient access to funds for a specific purpose — in this case, holiday spending. Using words like “holiday,” “Black Friday,” “Christmas,” “express” and “fast” will clearly communicate the purpose and value of the loan. For more tips on naming your holiday loan, check out this resource.

Step 3: Have Fun with Marketing.

You’ve nailed down the details. You have a name. Now, it’s time to get the word out to your members. Take work off your staff’s plate by taking advantage of the dozens of tools in our QCash Marketing Portal, which includes images, videos, webpage copy and more. You can filter specifically for holiday-themed resources to find what you need faster.

If you have any questions, please contact your Client Relationship Advisor.