Best place to shop for a personal loan

Average reading time: 13 minutes

Overview

Personal loans

Credit Karma works with 20+ lending partners, enabling comparison shopping for our members without impacting their credit scores. We help people find the best personal loan and guide them throughout the journey to achieve their financial goals. Credit Karma makes money when member gets funded and not based on offer impressions.

Credit Karma

With over 110 million members, Credit Karma helps make financial progress by offering credit monitoring and recommending products based on member journey.

Key contributions and impact

Key contributions

Informing product decisions with qualitative data.

Collaborated with Director of Product to get stakeholder buy-in for engagement surfaces by designing member journey and product vision.

Improving team health by hosting retros and making progress on action items for the design team.

5@2x

Impact

Personal loans engagement went up by 5x (shopping and engagement surfaces)

The revenue increased by 3x over two years compared to Nov 2019

2x Exceptional Impact Program award and a promotion

2x Giving Cred Winner: Giving Cred was started by Karmanauts, for Karmanauts, in order to recognize peers who exemplify company values

Started managing a team of three designers (credit cards)

Role and responsibility

Earn a seat at the table

The previous two attempts to design personal loans marketplace were not successful. The leadership put together a new team. I was an external hire, and my counterpart, Associate Product Director, was an internal mobility hire.

Stepping up as a user researcher

Our product and design team lacked a full-time researcher. I stepped up and built the habit of gathering member feedback and sharing it with stakeholders.

Managing design work

Worked with product managers to organize and track the requirements and distribute the work.

Karma Product Language

The design system team started building components for consistency and cadence around the same time. I was responsible for providing feedback and working with the product and engineering leadership to start integrating elements in the ship track work.

Execution

Minimize the gap between desirability and feasibility. Executing the primary interfaces/flows (iOS) to set the experience direction.

Who are we designing for?

People wanting to pay off debt

Debt consolidation is the top reason people apply for personal loans. Around 67% of applicants took a personal loan to refinance credit cards and start their debt pay-off journey in 2021.

First time borrowers

A personal loan is a considered purchase. The first-time borrowers start with a simple google search, talk to friends, bank representatives and rate shop before application. The process is not easy. It can quickly turn into decision remorse with a high APR loan and an unpleasant application experience. 

Repeat borrowers

Repeat borrowers prefer to work with the existing lending partner because of the shortened process, resulting in instant access to funds. 

What are their needs?

First time borrowers

Awareness of high-interest debt costs

A high-interest debt significantly impacts members' ability to make financial progress. Many people are not aware of credit card debt costs. Tracking credit utilization and its impact on the score is the first step in the debt payoff journey.

Affordability

Is a personal loan right for me? How much should I borrow? Can I afford it? Will I be able to make monthly payments? Is APR too high? These questions keep members from making decisions and taking action, resulting in high-interest debt.

Decision fatigue

Many people struggle to balance the desired loan amount, affordable monthly payment, and preferred APR. Choosing a loan from hundreds of offers from various lending partners is a time-consuming and heavy cognitive process. Many members seek support from the platform or like talking to domain experts.

Certainty in approval

The personal loans market is full of bait and switch offers. The advertised lower APR and lower monthly payments engage members with the loan application process. The APR and monthly payments often change later in the process based on income verification. When the member gets to the final offer, it's too late to back off. Hard inquiry by the lender lowers members' credit scores and makes it nearly impossible for them to find better offers.

Repeat borrowers

Saving money on interest

The repeat borrowers want to save on interest and monthly payments, when possible. Most repeat borrowers consider re-financing a loan after 12-18 months of on time payments. 

Long term needs

Avoiding decision remorse

Once the loan is approved and the member receives the funds, it's essential to use it for the right cause and keep credit card utilization low. Failing to do so leads members to a debt spiral and decision remorse.

Temporary solution vs. change in behavior

Personal loan is a temporary solution to the problem. It does help to save money on high-interest credit card debt. But the shift in spending behavior and responsible use of credit cards is a long-term solution for healthy finances. 

What are the product goals?

Goals

1. Designing product experience for improved business model.

2. One marketplace to minimize execution complexity and cost of maintenance.

3. Deliver a revenue positive marketplace compared to previous version.

4. Improve member retention in marketplace. 48% members navigated away from the marketplace.

Challenges

1. The improved business model required lending partners to onboard the new tech platform. The process demanded time with legal, compliance approvals, and business deals. 

2. Optimization was the preferred route to measure the impact on revenue. 

3. Inconsistencies in interface across platforms and surfaces took a considerable execution time to deliver a winning variant.

Old model and it's challenges

1

25%

Members see offers

Typical experience

48%

Members navigate away

Members did not start the pre-qual form

Dropped off after submit the pre-qual form

27%

Members not eligible

Members approval odds were below 20% for all partners; or

Members were declined in all pre-qual process

The standard pre-qualification experience

The process started with a lengthy questionnaire collecting important information like income, employment status, address, and SSN. Credit Karma would share members' data with 20+ lending partners. This exchange of information happened with members' consent. It took a minimum of 13 seconds for our lending partners to respond with an answer. The answer was either.

Is Pre-qualified: Pre-qualified members experienced a different marketplace, known as the PQ marketplace. The marketplace was revenue positive. Pq-offers had 85% approval certainty.

Is not pre-qualified: Members who were not pre-qualified were redirected to an advertised offers marketplace. Mostly ending in a negative experience, advertised offers had 50% approval certainty.  

Application rejected: These members would receive letters from lending partners explaining why the reason for rejection. Members got confused as they were unaware of applying to the specific lending partner via credit karma. Confusion around Notice Of Adverse Action was a problem highlighted by the member support group.

New improved model and it's advantages

2

Higher certainty

The model resulted in 90%-95% certainty of offers, minimizing down funnel surprises and drop off.

Minimized errors

No need to fill up lengthy questioner. 

Accurate offers

Offers based on members current financial state.

Design process

The member interviews highlighted that not everyone who lands on the marketplace is ready to shop. Many of them were not even sure if personal loan is the right choice for them and few were rate shopping with the hope of getting an affordable loan. 

Leading with this insight the team started focusing on shopping experience. The marketplace design evolved over 8 months. After delivering the revenue positive marketplace by August 2020, I shifted my focus on the newer surfaces. 

My loans

Helped members to monitor their existing loan and save money by refinancing. Comparing existing loan with the new loan resonated with repeat borrowers.

Application status tracking

Offered credit score insights, tips to get funded and focused on long term goal.

Borrowing power

Resolved the loan amount uncertainty by showing the factors impacting members ability to get approved for higher loan amounts. Especially focusing on members who are not sure if personal loan is right solution for their problem.

4

In Q1 2020, I worked with my product counterpart to map member’s state of mind, desired experience outcome and potential product solution. Identifying the jobs to be done by marketplace was really critical to align on the success metric for the marketplace.

Design decision 1: Redesigning offer tiles

The most important interface in the marketplace. Offer tiles make comparison shopping easy. Visual layout and information hierarchy are critical in decision making. As part of the redesign, I created over 62 offer tiles based on member input, competitive analysis and business goals. The final design was selected as a template based on Information hierarchy, scalability and the business goal. 

PL-Offer-tiles-evolution-

On demand compact and grid views for advance users.

PL-Offer-tiles-evolution-2

62 offer tiles design explorations

Offer-tiles-explorations-with-CTA
Offer-tiles-explorations
Offer-tiles-explorations-with-CTA-Optional-lockup

Design decision 2: Context and filters

Design decision 3: Suppressing advertised offers

Design decision 4: Top offers variant