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Automobile Loan Protection is a risk management program that enables lenders to increase loan volume and finance income on direct and indirect loans. Additionally, Loan Protection improves loan yield and profitability by significantly reducing losses on repossessed vehicles.

Loan Protection purchases repossessed vehicles based on guaranteed vehicle values less collision damage, mechanical defects, or excess mileage. Purchase offers are consistently higher than auctions or re-marketers. To further reduce deficiency loan balances, the program provides principal balance reduction payments to a maximum of $5,000.

  • Lenders make all loan approval decisions.

  • Lenders recover 90% to 100% of the Loan Protection fee on direct loans by increasing the interest rate 1.5%.

  • Lenders recover 100% of Loan Protection fee on indirect loans by short funding the dealer.

  • Loan Protection provides 60% to 80% reduction of deficiency balances on repossessed vehicles.

  • Loan Protection available on vehicle purchase prices from $1,000 to $80,000 and loan terms from 1 to 8 years.

  • Loan Protection is applied to both new and used cars, trucks, and vans with maximum protection of NADA retail on used vehicles or MSRP less rebates on new vehicles.

  • Refunds provided on paid-off loans.
  • Automobile Loan Protection is administered by Lenders Option Corp. (LOC) - Shreveport, LA

Example of bank loan policy:

  • C, D, and E tiers (18 months or more on Credit Bureau)
  • Debt-to-income ratio exceeding 35%
  • Loans with LTV of greater than 80%
  • Minimum previous high credit limit of $2,500
  • Maximum delinquency of four 30 day or three 60 day within last 2 years
  • Maximum $500 charge-offs, collections, judgments, etc. in last 2 years
  • Previous bankruptcy with 2 years re-established credit

Web-based form completion

Banks complete Interim Order form at LOC's website on loans selected for Loan Protection. Website provides a monthly billing and an archived billing.

Comma delineated file for data transmission

Comma delineated file may be emailed rather than completing Interim Order form at LOC's website. A monthly billing is e-mailed to the bank.

Web-based claims processing

Repossession claims

  • Banks complete Notification form and Option Call form at LOCís website. Forms provide vehicle location and loan information.

  • LOC assigns a condition report on the repossessed vehicle and completes a purchase offer for the vehicle. The principal reduction payment is also completed at LOCís website.

If LOCís offer for the repossessed vehicle is accepted, LOC emails a bank draft envelope with instructions to transfer title to LOC. The bank receives an official bank check as payment for the vehicle and the principal balance reduction payment. The entire process should be completed within three to four weeks.

If LOCís offer for the repossessed vehicle is rejected because a higher offer is received, LOC will calculate the principal balance reduction payment using the higher offer.

Lenders Financial Insurance Services
(248) 689-2001
(855) 313-1468 (fax)