A lender’s intuition might reason that borrowers with the highest credit scores will qualify for the industry’s lowest rates and will therefore be among the most price sensitive. But in the competitive world of unsecured lending, speed can trump rate, and it can mean unlocking higher margins from the most qualified borrowers.
According to Curinos LendersBenchmark data that measured application-to-booked cycle time since Q1 ‘22, top-performing lenders funded loans from 740+ credit score borrowers an average of 5.5 days faster than their peer group. Their reward? They actually earned an average rate that was 60 basis points higher. And in the last two quarters that difference has doubled: Top performers on cycle time have increased average rates by 100 bp while the average rate for peers dropped 20 bp. The rate gap between the two is now the widest it’s been in nearly three years.
Bottom line? Speed matters. Borrowers with credit scores 740 and higher are willing to pay a premium if it means faster access to their funds. Which means that for the unsecured lender, speed can mean materially higher margins.
Cycle Time Performance and Average
Interest Rates for 740+ Credit Scores
Even the most creditworthy borrowers are willing
to pay a premium rate for faster cycle times.
