The Lender Approval Time Dashboard is designed to give you the data you need to assist your clients is choosing the right lender for their needs.
It gives you the information you need to make a detailed assessment of each lender's performance, and to be able to compare a number of lenders against each other using standard data.
What are we reporting on?
It's important to understand that the dashboard is reporting on:
- days to unconditional approval
- excluding applications for Approval in Principal
It’s calculated in the number of days between submission and approval and includes weekend days.
We’ve chosen this measure because:
- it’s the one that we feel means the most to a borrower - that is, the time it takes a lender to definitively approve your client’s loan, and
- it is the one standard stage that every lender has in their backchannel messages
We look at all the applications approved each day, and calculate the number of days it took for each of those loan to be approved.
We can then group the data for each application into any time period, say a week, 14 days, calendar month etc, and then use some simple statistical measures that allow you to compare one lender with another in a meaningful way.
A short explanation of median and percentiles values ( for days to approval)
In statistics, the median value of a set of ordered data is the middle number in the set. In other words, 50% of the data points will be lower than this value, and 50% will be greater than this value.
So in our report, we look at all of the loans approved over a period of time, and we sort them from fastest to slowest.
We then find the middle loan in the list, look at how many days it took for it be approved - and this is the median value. This is sometimes referred to as the 50th percentile.
Another way of saying this is that 50% of the loans approved were approved by the median number of days or faster, and 50% of loans took longer than the median number of days.
Similarly, the 25th Percentile is the time taken for fastest 25% of the loans to be approved, and the 75th Percentile is the time taken for fastest 75% of the loans to be approved.
Why use the Median Value and not the Average?
Where you have data sets where there may a few extreme values, (ie, loans that have taken a really long time to approve) the average value can often be quite different to the median, and in fact be quite misleading.
Often, the median is a more "typical" representation of a set of data than the average of the data.
If you'd like to learn more about this topic check out this article in Wikipedia.
Here's a snapshot of the Dashboard with Connective Essentials highlighted.
The table on the left shows data for all loans approved in the last 28 days by all lenders who report this data to us.
The table shows:
- the name of the lender
- the median days to approval for all loans approved in the nominated period
- the number of loans approved in the nominated period
The boxes on the right show the specific data for the selected lender broken down further into both smaller and larger percentiles.
Focusing on Connective Essentials, it shows:
- the number of loans approved by Connective essentials is 168
- the number of days taken for the fastest 50% of loans to be approved by Connective essentials is 13 days.
- 75% of the loans approved by Connective Essentials in the last 28 days were approved within 21 days or less.
The numbers are also colour coded as follows:
The median approval time shades from green (low number = fast) to red (high number = slow).
The number of loans shades from red (low number of approvals) to green (high number of approvals) - the reason for this is that the higher the number of approvals, the more meaningful the median approval time will be.