A second company has entered the fledgling business of making ATM-like terminals dedicated to loan sales.

Dyad Corp., a start-up operation based in Norcross, Ga., joins Affinity Technology Group of Columbia, S.C., in providing self-service machines that let banks land new credit business at a relatively low cost.

Though several influential banks are lending through automated loan machines, most are using them to gauge consumer reaction.

Widespread acceptance of the terminals depends on "whether this approach to lending is going to hit a particular consumer need," said Ira Morrow, research director of financial services industry at the Gartner Group.

For banks, the primary attraction of the terminals is that they can reduce loan processing costs. According to Andersen Consulting, a loan originated at a branch costs between $1,800 and $3,800 to process. Processing through an automated loan terminal lowers costs to the $300-to- $700 range.

The cost savings come from eliminating human involvement in individual loan decisions. Loan applicants input data at the terminals, and the system runs the data through an automated decisioning system. Both Dyad and Affinity terminals can deliver decisions and loan proceeds in a matter of minutes.

But the two company's machines do have their differences.

Affinity terminals route application information to a decision support system it developed. The system, which pulls credit reports from third- party providers, delivers decisions based on criteria preset by the bank operating the terminal.

By contrast, Dyad's terminals make extensive use of banks' existing lending systems. They also use credit scoring technology from Fair, Isaac & Co.

Mr. Morrow said the jury is still out on which approach is best. "Best is in the eye of the buyer. This is whether you want an intermediary between you and the customer," he said.

C. Michael Bowers, president and chief executive officer of Dyad, explained his company's approach: "Banks have spent billions of dollars on their own infrastructure, their own computer systems. They have to have something that will fit into their system."

Dyad's line of desktop automated loan machines is designed to make unsecured consumer loans of up to $15,000. The terminals sit on a desktop and can be located either in bank offices or in remote locations, such as car dealerships.

As with the Affinity terminals, Dyad's machines will let banks set the criteria for granting a loan.

"With the ALM, the people who are granting the loans will have the ability to decide how much risk they're willing to take on," said William Barnes, a senior product manager with Fair, Isaac.

A major Tennessee bank has signed on to pilot the Dyad terminals in the next 30 days, Mr. Bowers said.

Dyad is an affiliate of Intercept Holdings Co., , a provider of banking services also in Norcross.

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