Let us face it; these days, a significant portion of individuals looking to take out loans are people aged 20 to 40 years old or Millennials and Gen-Z generations. These individuals are coming of age and are planning to get a new car or home.
Targeting these demographics is pretty crucial for financial institutions and lending firms. And as a financial institution or lending firm, these organizations have unique opportunities to offer individuals the best consumer loan options available in the market today. This article will take a closer look at the most common types of consumer loans and how organizations can hone in on various marketing strategies to target Millennials and Gen-Z demographics and their needs.
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Lending firms have the advantage
As a lending firm and a non-profit, the goal of these companies, as well as their mission statement, is to help and serve their communities. Their purpose provides them with the upper hand compared to traditional banks focusing on their bottom line and making their executives rich and happy.
Take this opportunity to use the organization’s community support and engagement to gain the lending of these generations. Possible new clients for the company of Millennials and Gen-Z individuals are now more involved in their communities and value-outreach efforts. To be clear, individuals considered Millennials are people between 23-38 or 40 years old.
The generation below is considered Gen-Z. Generally speaking, people born after 1997 are considered Gen-Z. Now that we are clear about some things, there are risks in lumping or generalizing individuals into categories based on age. But for the purpose of offering helpful support to communities by providing good and quality consumer loan options, it is an excellent idea to grasp what motivates and captivates the groups mentioned above.
Younger generations need home loans
Millennials account for at least 42% of home mortgages. That is a significant number of potential new clients. Most of these people are still at the stage in their lives that they are looking to purchase starter homes. Although there are exemptions, the age range in this group is pretty broad.
But statistics do not lie, with up to 65% of millennial borrowers being first-time homeowners. Another impressive statistic to be aware of is that 98% of the property owners financed that purchase using a lending firm or credit union. These individuals are starting to settle down.
Credit organizations can help them see that their company is the right choice by showing clients how they can help when it comes to these important life decisions. Credit unions should try offering comparison tools and excellent price calculations. Nobody wants to pick up their phones for pieces of information anymore; that is why they do not make them.
The good news is that these people are tech-savvy, so they will be able to figure out various tools that help estimate their costs. These organizations offer price calculators for every credit option they have. How long will it take them to pay off their loans or pay off their credit cards? Even savings and retirement calculators are very helpful. It is easy and simple to use, which is precisely how these people want it.
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Student loans
Let us take a closer look at slightly younger individuals. Young Millennials who are planning to go back to school, as well as older Gen-Z people who are just graduating from high school, are looking for competitive loan options for their student loans. As a leading firm, these companies should care about students’ future.
They care about their clients and the outcomes that their client borrowing yields. Building up their members also builds up their community. College grads earn more or less $30,000 per year compared to non-college grads. Investing in younger members’ education helps credit unions reap benefits not just to their futures but also to their community’s financial stability as a whole.
It is imperative to recognize that getting student loans are usually the first big financial decision in young people’s lives. They most likely have little to no experience when it comes to dealing with financial institutions and may not have people in their corners to help them through various arrays of financial services.
Credit unions can be the ones to give these young people a hand. Organizations should offer guides, education, as well as learning tools. Gen-Z individuals that are looking to their futures can use some financial advice and guidance. Companies should not lose sight of the demographics for which they are aiming. Traditional pamphlets and marketing strategies are not going to earn the people’s trust.
Auto loans
In previous years, younger generations have become an important leading demographic of individuals looking for consumer credit for auto debentures. Younger generations raise their auto debenture balances by as much as 23% in a single year. Working with individuals from Gen-Z and Millennial generations can present a couple of challenges since they shop for things on the Internet, from toothbrushes to automobiles.
They do a lot of research, compare prices, and sometimes purchase cars online. So, knowing that, companies need to focus their marketing efforts there. Since these people are some of the biggest consumers of online video content, why not use this platform? Video contents are pretty simple to put together, as well as easy to put on the Internet.
Take this opportunity to make video content that is both engaging and educational. Companies can tell the story of how they have helped tons of their clients purchase their dream cars. Credit unions offer easy-to-understand and short video content on the basics of car loans.
Regardless of what age group borrowers belong to, everyone wants clear and concise information delivered immediately. Would you rather read definitions and terms related to car debentures or listen to a three- to five-minute video content that explains these things with precision?
Personal debentures
Organizations are going to want to learn their personal debenture marketing campaigns towards the older Gen Xers and Millennials. After all, they have, on average, twice the number of personal debentures compared to Gen X and Boomers ever did. They are looking to build their futures and lives, finding consumer debenture options for everything from financing weddings to helping them pay for a move to another city after they graduate. Throughout their lives, they need extra money flow and tons of guidance.
