Offering monthly payment options to customers can have a huge impact on your business, from expanding your customer base to increasing your revenue potential from every sale. For customers, the option of low monthly payments can help them achieve necessary upgrades when finances are tight or get them the upgrade that they really want when they don’t have the cash on hand.
Why, then, do so many businesses decide that financing isn’t right for their customers, before even offering it to them? We’re going to debunk the myth that financing isn’t helpful to customers by showing you why consumer financing benefits both you and them.
Why Should Customers Care About Consumer Financing?
Financing makes it possible for your customers to turn their aspirations into reality. There’s no doubt that home improvement projects are expensive, and many customers will hesitate when committing to such a big purchase, no matter how much they may want it. You can offset the sticker-shock of a large upfront investment by offering the option of affordable monthly payments, which will be much easier to manage.
Plus, with flexible financing options such as varying amortizations, customers can access higher-ticket items and projects without having to increase their monthly spend. For instance, the cost-per-month for a $15,000 loan with 120-month amortization works out to $189.61. However, a $20,000 loan with 240-month amortization would be $179.30—they’re getting more money and paying less per month.
Comparing Interest Rates
We’ve made the process as convenient as possible by allowing you and your customers to complete the application on the spot at the point of sale. In many cases, the biggest hesitation will revolve around interest rates. Here’s what you need to know.
If your customer needs financial support for their home improvement project, they’re going to get it from somewhere, whether it’s through your business or somewhere else. Our interest rates are lower than many other lenders, which can have a significant impact on how much customers are paying. Let’s break it down:
- Interest rates on a credit card can be as high as 19.99%, possibly even more depending on the type of card. (Cash advance rates will be higher as well.)
- The rate on unsecured personal loans can be up to 47%.
- In comparison, the interest rate with SNAP Home Finance is under 10%.
By choosing a loan through SNAP Home Finance, your customers can secure significantly lower monthly payments, which means they are better equipped to afford the home improvement project of their dreams.
How to Circumvent Credit Card Purchases
A common obstacle we’ve seen to closing financing deals is that many customers are opting to put home improvement purchases on their credit card. These customers are likely doing one of two things:
- They’re paying it off right away through other means (a cue to upsell because they obviously have available dollars to spend).
- They’re using their credit card to facilitate the transaction and paying it off over time.
Here are a few tips to remember when you’re sitting at the kitchen table:
- Start by asking which of these scenarios they fall into.
- Customers who pay off debt slowly over time are prime candidates for low monthly payments. Plus, their cost of borrowing will be lower with SNAP Home Finance.
- Remember, the interest rate on most credit cards is higher than ours. Clearly showing them the cost breakdown of each option allows them to understand where they’ll find the most savings each month.
- For customers who are paying off their credit card purchases through things like bank loans, show them the affordability, and then play up the added convenience.
- The process with SNAP Home Finance is quick and simple—the application can be done on the spot, they can find out the same day if they’re approved, and then you can keep the project moving, rather than having to wait on their bank for rates and approvals.
At the end of the day, the goal is to make your customers’ lives easier (and happier) by enabling them to complete the home improvement project of their dreams. With our flexible financing options, you have the power to do just that.
For more information on promoting low monthly payments with SNAP Home Finance to your customers, or for tips to overcome common customer objections, reach out to your Business Development Manager today!