What Is 240-Month Amortization?
The 240-amortization option allows customers to spread out their loan payments out over a longer period of time (20 years), which significantly reduces their monthly payments. The 240-month amortization plan can actually reduce a customer’s monthly obligation by as much as 29%.
Here’s another way of looking at it. With the 240-month amortization plan, a customer can get a higher loan amount but still have affordable monthly payments.
3 Ways That 240-Month Amortization Can Help You Grow Your Business
Now that we’ve cleared how this product benefits the customer, let’s delve into what it means for you and your business. There are three key benefits to you to keep in mind when it comes to the 240-month amortization product: a higher average ticket, higher closing ratios, and an expanded customer base, all of which will lead to higher sales volumes.
- Increase Your Average Ticket: Through the 240-month amortization option, customers are able to afford more with a lower monthly payment. This increased purchasing power means they’ll be less inclined to compromise on what they really want, which in turn means it’ll be easier for you to promote the best quality products, or additional products. In other words, you’ll be able to increase your average transaction value.
- Improve Your Closing Ratio: It’s a no-brainer that it’s often easier to sell someone on a lower monthly payment than a large upfront cost. For example, a home improvement project can easily cost upwards of $20,000, which may be out of some customers’ budgets when paying upfront. They’re more likely to sign off on spending less than $100 a month through a loan paired with the 20-year amortization plan.
- Expand Your Customer Base: The more options you can provide, the more likely you are to appeal to different demographics—just like how you offer the highest-quality product, as well as the most affordable option. Likewise, having a variety of financing options will help you appeal to a wider range of budgets, which in turn can increase your conversion rate. For example, someone who couldn’t afford a full kitchen reno because of the upfront cost may now be interested because they are better able to manage the lower monthly payments. Just like that, you’ve gained a new customer instead of losing the lead.
You’ve already taken the first step toward growing your business by partnering with SNAP Home Finance. The 240-month amortization product is the perfect way to drive your momentum and make this your most profitable year yet. For more information on this or any of our other financial products, speak to your Business Development Manager today!