What student services can teach lenders about Gen Z

While many think the best way to reach Gen Zers is through their phones, the truth is, they want a personal connection, especially about their finances.

It should be remembered that mortgage originators are the best of this age – those born between 1997 and 2012 – heading into the real estate market. They have experience from applying for student loans that showed their character.

The one thing they seem to hold dear is a desire for customer service, said Sara Parrish, president of CampusDoor, a unit of mortgage broker Incenter that provides early childhood services. school loans.

Gen Zers love to work with startups in many ways, but they’d rather do something than pick up the phone to call for help.

“But in our experience, Gen Z appreciates a personalized concierge approach,” Parrish said. “When they get to the point where they need to pick up the phone, they want to be able to talk to someone who will have all the answers for them.”

They have a lot of information at their fingertips, so their questions are not basic, Parrish said.

“The questions they ask over the phone, through chat, through email, even text, are smarter,” Parrish said. “Talk me through my APR? What is this fee and what does it mean? Tell me, about repayment options and what that means for my years under the way?”

In addition, older generations were more willing to face conflict in the process. Gen Zers are “less dependent on their parents in some ways,” Parrish said. “They are doing their own research, and when they submit their proposals, they compare us, not with other lenders, but with other technology companies like Uber and Amazon.”

Others know that the younger generation may not be very independent. Javelin Research found that most Gen Zers who have moved on to home ownership are getting mortgage advice from a personal connection, the first source being their parents and the second from a real estate agent.

“It’s the fact that human beings meet and are driving where to get a mortgage and whether to get a mortgage,” said Javelin lead researcher Babs Ryan. “When Gen Z gets loans, they really want, more than other age groups, human help, not digital help.”

They want someone they can talk to, who can help them through the process.

“There is still a high performance of the group under 30 who are living at home now, even more than four years ago before COVID,” the report said. said Ryan. “Their parents are great influences to help them with what to do.”

When it comes to loan servicing, 39% say their No. 1 priority is to talk to someone, Ryan said.

Support is a big way, “we know at the bank, there is always interest in the Internet on mobile phones for many different functions,” said Ryan.

In fact, donors may be better off avoiding going all-in on technology that looks to remove people from the process, Parrish said.

“In our experience, you can create a great user experience for Gen Z by borrowing from your network, with your motivation, and your ability to provide great customer service and just by adding the bells and whistles to adding value to the customer,” Parrish said.

However, from CampusDoor’s experience, Gen Zers are moving away from parental advice.

“Because of these (school) loans, the opinion of the parents is important and the relationship of the parents is important to some extent,” said Parrish. “But we’re seeing every year, more of those decisions go to the borrower, and a little less to the parents, and the borrower does a lot of their research online.”

Gen Zers too better rate sensitivity when it comes to getting a student loan and that want to buy may follow them in the purchase of houses. Prices, more than brand loyalty, drive their decisions about where to get a loan.

“They know very well how the rates affect the amount they’re paying back over time,” Parrish said. “They’re asking questions about that. It’s just a whole different ball game.”

Due to the rising cost of education, especially when one is pursuing a graduate degree, these students are borrowing more money. when buying a house.

Recent research from Gen Z Planet found that 68% of this group believe home ownership is important for economic creation.

“They’re showing this horrible list of behaviors,” Parrish said. “It’s going to really play into their other big life decisions and big purchases that they’re making.”

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