Is Consumer Credit a Good Option for Your Customers?
Providing financing for your clientele can be a bit of a conundrum. While you want them to purchase your products, you certainly don’t want them doing so at the expense of their personal credit and livelihood. The beauty of consumer credit is that it actually is a good option for customers. As long as they can comply with the terms provided by the lender, having a line of credit allows buyers to purchase what they need and pay for the items in installments.
If the financing came with high interest rates, most consumers would view it as a scam. To avoid that and add incentive, lenders will typically offer the credit with an interest-free grace period of six months or so, giving customers a chance to pay down the balance without incurring any fees at all. While the lending company doesn’t make money off of this model, they do come away with free advertising through your company. It’s important that your customers are made aware of the financing terms, because rates tend to skyrocket at the end of a grace period. As long as people understand the fine print, consumer credit is usually very helpful for people making a big purchase.
Since everything is prearranged between the retailer and the creditor, customers don’t have to jump through many hoops to secure the financing. They fill out a form or two, get approved and are free to buy what they want. It’s likely the easiest loan application process in existence, something consumers surely appreciate.
This is helpful for both the customer and the retailer. Credit lines aren’t just issued for a single-item purchase; you can sell 20 different things and finance it all in one lump sum. While this doesn’t directly save consumers any money, the option to pay in monthly installments enables people to budget for what would otherwise classify as overspending. It’s much easier to budget $100 per month over the course of several months than it is $500 in five minutes. You’re not upselling the customer or trying to convince them to spend more money than they want to. Consumer credit simply allows them to pay for products over time and in smaller amounts.
It’s important to have your customers’ best interests at heart. That’s what will make for repeat clients and give your business a good reputation. Consumer financing is a great way to encourage people to buy your products while you maintain integrity and do right by your clients.