ING is committed to growing consumer credit in Spain. The entity has opened its so-called ‘orange loan’ to non-customers (without commissions, maintains the interest rate throughout the life of the loan and does not require payroll to be directly deposited) with the aim of offering cheaper credit to potential new customers and gain share in a market where it already has 6%. Specifically, the entity will offer a personalized price to non-customers and an interest rate that will be set based on their profile.
To do this, the user will have to access their main bank from the ING website so that the entity can analyze the financial information, establish the risk profile and, from there, calculate the installment that will be applied to the loan, which will vary in a range of between 4.06% up to 11.01% APR.
To give an idea of what these figures mean, according to data from the Bank of Spain for the year 2021, the average interest rate applied to consumer credit was 7.3% in December, so the installments of ING will be at the bottom.
In fact, with this launch the entity plans to make credit cheaper for non-customers, since until now, not knowing the financial profile, the risk was higher and a higher fee was applied. Instead, it will now match your profile so a good customer will get a better price.
According to the entity, this launch represents a competitive advantage, since “few entities in the market manage to offer non-customers an interest rate according to their profile”. The loan will be granted in a maximum of three hours, details the bank.
It also highlights that it has risk and anti-fraud models. In this way, after connecting with their main bank, the user will generate a personal password to access the ING application and website. The bank will make an identification video call, announce the final installment and the loan can be signed completely online.
ING has a 6% market share in consumer loans, which is 20% more than a year ago and has an outstanding balance of 3,000 million.
The consumer credit business is key for ING in Spain and is in full growth. In fact, in 2021 the entity carried out a renewal of the organization chart in which it brought Tarik Tawfik from the Netherlands, to put him in charge of the consumer finance department.
According to Almudena Román, director of banking for individuals at ING, “our digital capabilities and data analysis have enabled us to take a very important step in a key segment for the bank’s growth. We will be able to offer very competitive loans, with the best experience, while maintaining our moderate risk level.”
According to data from the entity, 57% of loans are contracted through mobile phones and this launch will strengthen ING’s position in digital banking. The entity points out that it will also allow it to better understand the client and maintain its risk management. 82% of the loans are pre-granted and the default rate is 1.25%, among the lowest in the sector.