The lending landscape hasn’t shifted dramatically so far in 2025, but subtle changes are creating big opportunities for portfolio growth using a fresh perspective.
In my conversations with credit unions and banks across the country, I hear a similar stance: there’s interest in new lending programs, but lingering hesitation around stepping outside the mortgage and auto comfort zone. But in truth, newer programs, backed by the right strategies, are working. The institutions leaning in are seeing real results.
While strategies vary, three shifts keep surfacing in every conversation. Here’s what you should be paying attention to and how they’re opening new paths to scale, responsibly.
1. Embedded Finance Is Winning at the Point of Need
Embedded lending has moved past the buzzword stage and has now become a reliable growth channel for lenders. Institutions that have prioritized embedded finance partnerships are seeing higher conversion, better quality borrowers, and more personalized engagement. Why? Because they’re showing up where consumers are already making purchase decisions. Traditional application funnels still matter, but they can’t compete with the immediacy and relevance of embedded offers delivered at the point of sale.
At LoanStar, we’ve built our entire platform around this premise. By embedding lenders directly into the ecosystems of local and national merchants, whether it’s for HVAC, home improvement, pool & spa, medical, or elective services, we enable financial institutions to serve borrowers in real time, at the exact moment they need financing. That’s more than convenience—it’s strategy.
2. High-Risk Loans Aren’t Fooling Anyone
There’s been a surge of lenders pushing unsecured loans under the guise of “home improvement,” but consumers and regulators are catching on. The mislabeling may yield short-term volume, but it introduces long-term risk. Market-leading institutions are becoming more transparent, more purpose-driven, and more compliant in how they position unsecured offerings. Growth in this environment depends on trust, and misrepresentation simply won’t scale.
This is where LoanStar’s model creates clarity. We help lenders design programs to offer true unsecured installment loans tied to merchant services, with clear terms, compliant categorization, and full visibility across the lending lifecycle. Transparency isn’t just a regulatory checkbox; it’s a competitive advantage.
3. Credit Unions & Banks Are Quickly Reallocating Budgets
Many credit unions and regional banks are shifting dollars away from legacy channels like mortgage marketing, auto loan campaigns, and outdated fintech partnerships. Instead, that capital is being reinvested into lending strategies that target more profitable deals. That means scalable, high-impact channels focused on consumer experience and embedded, point-of-need financing through popular merchant partnerships.
LoanStar is uniquely positioned to help these institutions pivot with ease. With fast implementations, loan program templates, merchant-centric onboarding, and real-time offer management, we help lenders scale strategically while staying true to their community-driven missions.
The Bottom Line
Lending growth is still very much on the table, but it takes a willingness to push to evolve. The institutions poised to win the second half of 2025 are the ones willing to rethink their approach to program design, audience reach, and relevance. At LoanStar, we know that embedded finance, transparent positioning, and smarter budget alignment aren’t optional—they’re the playbook.
Let’s build what’s next, together.
Eric Snyder
Chief Revenue Officer, LoanStar Technologies
