When you receive a loan or open an account with a bank, you may soon be offered additional loan products tailored to your financial profile—a practice known as cross-selling. For example, after securing a mortgage, your bank might propose a Home Equity Line of Credit (HELOC) or a personal loan. This approach helps banks grow deeper customer relationships while offering potentially convenient products.
Banks use your financial data—including your credit history, income, and payment patterns—to identify suitable products they think you might need. Cross-selling examples include:
- Mortgage holders receiving HELOC or personal loan offers
- Auto loan customers offered credit cards or personal loans
- Checking account holders presented with overdraft protection or savings options
- Small business loan borrowers offered business credit cards or lines of credit
Benefits of cross-sell loan products include streamlined application processes, potential discounts for having multiple products, and simplified financial management through consolidated accounts. However, the offers might not always have the best rates compared to other lenders, and accepting new loans without necessity may increase your debt load.
To evaluate cross-sell offers wisely:
- Take time before responding to offers
- Compare rates and terms from multiple lenders
- Read all terms including APR, fees, and penalties
- Assess whether you really need the loan
- Negotiate terms as an existing customer
Cross-selling is a legal and common practice but must be transparent and not deceptive. It differs from upselling, which involves offering an enhanced version of the same product rather than a different product. Declining a cross-sell offer will not harm your bank relationship.
For more information on related financial products, see our glossary entries on Home Equity Line of Credit (HELOC) and Personal Loan.
Sources:
- Consumer Financial Protection Bureau: Are financial companies misusing your data?
- Investopedia: What Is Cross-Selling? Definition, How It Works, and Examples
- Forbes: Upselling and Cross-Selling: A Strategy To Maximize Customer Lifetime Value