The missing links in digital lending: Connecting the entire borrower journey

From ordering dinner to hailing a ride, getting what you need now takes a few taps. On the surface lending has kept pace, with online applications and faster funding. But look beyond those individual moments, and the gaps in the borrower journey become clear.

The biggest challenge in digital lending isn’t any one stage. It’s what gets lost between them.

“Consumers expect digital experiences to be in lockstep with where they are at any given moment,” said Elana Golub, who leads product strategy at Method. “If they order a car, they expect that car to meet them where they are. If they walk down the block, they expect it to reroute. If they make a change in their finances, they expect their financial products to see that instantly.”

When we asked attendees of our American Banker webinar where they saw the biggest opportunities to improve digital lending, responses spanned the entire borrower journey (attendees could select more than one):

• 30% application and borrower data collection

• 30% underwriting and loan offers

• 21% funding and debt payoff

• 34% servicing and ongoing engagement

There’s work to be done at every stage, and in the hand-offs between them.

Elana was joined by Priyanshi Chharwala, who leads lending product at Method. Together, they explored four places where the borrower journey breaks down, and how lenders have the chance to close the gaps.

How lenders use real-time data alongside the credit report

Credit reports are the foundation of lending decisions, and payment history remains the biggest factor in creditworthiness. But reports don’t always reflect a borrower’s current financial position. By the time a lender sees one, it can be 22 days behind. That lag isn’t always significant, but for borrowers in the grey area — neither a clear approval nor a clear decline — it can be decisive.

“How that borrower’s picture has shifted over the last month could determine whether or not they’re actually eligible,” Elana said.

That’s why Method builds on the credit report. Starting with a borrower’s identity and consent, Method uses their report to identify outstanding tradelines, then connects directly to more than 20,000 financial institutions to retrieve real-time balances, APRs, and payment activity.

That gives lenders a current picture of the borrower they can carry from underwriting through funding and into servicing.

How lenders make sure debt consolidation loans pay off the debt

Lenders make more accurate offers when they factor a borrower’s planned debt payoff into the offer. 

Figure, which powers HELOC applications for lenders, uses Method to show borrowers their real-time balances and identify which debts can be paid directly at closing. That consolidation opportunity becomes part of the offer itself.

Priyanshi explained the logic with a simple example: a borrower with $5,000 in credit card debt they intend to consolidate may look riskier on paper than they will once that debt is paid off. Factoring the planned payoff into the offer gives lenders a more accurate picture of the borrower's risk.

The results tell the story. Figure saw 2x higher conversion and 50% lower delinquency over the following 60 days.

“When you present the borrower the opportunity to consolidate and execute that payoff in the funnel, that drives better outcomes for them as well,” she said.

Why lenders should pay creditors directly at funding

A debt consolidation loan exists to pay off debt. But when proceeds go to the borrower, around 43% of the dollars intended to clear existing debt remain outstanding afterwards.

“You’re crossing your fingers and hoping a borrower will use the proceeds to pay off the debts they said they would,” Elana said.

Traditionally, lenders disburse funds to the borrower and rely on them to pay each creditor individually. The process is slow and manual, and lenders have little visibility into whether those debts were actually paid.

A more direct approach sends proceeds electronically to creditors using verified account information, with each payment tracked through posting.

SoFi uses Method’s payment rails to let approved personal loan borrowers pay off credit card and loan balances held elsewhere. Across its lending partners, Method has facilitated more than $5 billion in creditor repayments.

How lenders retain borrowers after origination

Paying off debt at origination isn’t the end of the journey. Only one in three borrowers return to their original lender for their next product.

“You’ve spent so much money to acquire this customer,” Elana said, “but that customer won’t hold if you can’t meet them where they are.”

Staying close to a borrower means understanding how their finances change after origination. In our final poll, about half of attendees said they track those changes through periodic credit bureau updates. Continuous liability monitoring adds a real-time layer on top.

Priyanshi shared how a major mortgage servicer used Method’s continuous liability monitoring to look for HELOC and consolidation opportunities in its existing book. Over an eight-week study, the number of consolidation-ready homeowners grew 40%, adding $5 million in consolidatable balances. A snapshot taken at the start of the study would have missed them.

Monitoring can extend beyond approved borrowers, too. Some lenders collect consent at application so they can keep monitoring declined applicants, then re-engage them as their financial profiles improve.

Why digital lending works best as one connected journey

Priyanshi closed with the idea at the heart of the session:

“Digital lending isn’t about making each moment faster or easier. It’s a journey you’re taking with the borrower.”

The opportunity isn’t simply to digitize more stages. It’s to stop treating them as separate, so lenders can respond to borrowers as their financial circumstances actually change.