In unsecured lending, lenders spend enormous energy answering one question: Can this borrower repay?

Credit scores, debt-to-income ratios, income verification, bureau files, and increasingly sophisticated underwriting models all help estimate repayment capacity. Yet there is another variable that may shape outcomes just as meaningfully — and often receives far less attention:

What borrowers actually intend to do with the money once they receive it.

According to fintech strategist and lending executive Rachael Olson, two borrowers with nearly identical credit profiles can perform very differently after funding depending on how they use proceeds. 

For lending leaders managing tighter margins, higher acquisition costs, and rising pressure on portfolio performance, borrower intent deserves closer attention. Capacity and intent are not the same thing.

Why Lenders May Be Undervaluing Intent

Most unsecured personal loan applications ask what a borrower will use the funds for — letting people select from categories such as debt consolidation, home improvement, medical expenses, weddings, vacations, or major purchases. Many lenders believe that field feels administrative — useful for reporting, perhaps mildly informative, but rarely central to risk strategy.

Olson believes that view leaves a valuable signal on the table. In her experience, borrowers who indicate they plan to use funds to pay down debt often outperform similarly scored borrowers seeking money for more discretionary purchases. 

While a credit score can explain payment history, utilization, delinquency patterns, and existing obligations, it cannot explain why someone is borrowing at this particular moment or what financial behavior may follow.

Intent introduces context that traditional underwriting alone may miss. A worthwhile exercise for lenders may be to:

• Compare performance by stated loan purpose.

• Look for differences across borrower segments with similar credit profiles.

• Examine whether pricing or servicing strategies reflect those behavioral patterns.

• Test whether intent signals improve risk segmentation.

The Problem: Intent Is Hard to Verify

Of course, borrower intent is imperfect. Olson describes this as one of unsecured lending’s central challenges: the “pile of cash” problem.

After funding, lenders often lose line of sight into what happens next. Credit bureau reporting operates with a lag, meaning institutions may wait 30 to 60 days before seeing downstream effects. Even then, the picture remains incomplete.

Did debt balances actually decline? Did revolving utilization improve? Did the borrower materially improve their financial position — or simply add another obligation?

Historically, lenders had limited ways to answer those questions. That dynamic is beginning to shift.

Institutions are increasingly exploring ways to connect underwriting decisions to better post-disbursement visibility through consumer-permissioned financial data, cash-flow intelligence, and more direct payment experiences.

And, sometimes the best signal is also the simplest. Just ask the question.

Watch the full conversation with Rachael Olson below.