It happens to everyone at some point. A major expense suddenly comes up. It could be an unexpected bill, a family obligation, a medical need, or a car repair requiring immediate attention. Life just happens.
For many Americans, sudden large expenditures can put finances in a tailspin. And, to make things worse, the financing options available to consumers can become an even bigger challenge.
Customers seeking that additional cash infusion do have options. When creating a great customer experience, finding that financing option can be a big part of how they feel about doing business with service centers. You may have conversations about how they can finance that car repair as soon as possible. Here are some of the most popular ones—but with some significant caveats.
“Called Measure 428, an impressive 83% of Nebraskans voted to restrict predatory lenders’ ability to take advantage of elderly, low income, and other vulnerable populations.”
Payday Loans
Recently, voters in Nebraska said “enough is enough” to predatory lending practices of payday loans in their state. Through a ballot initiative, they voted to put a cap on payday loans at 36% interest. That’s a massive reduction from the whopping 404% limit previously allowed. Called Measure 428, an impressive 83% of Nebraskans voted to restrict predatory lenders’ ability to take advantage of elderly, low income, and other vulnerable populations. That makes Nebraska the 17th state (along with Washington D.C.) to put such restrictions in place.
It seems extraordinary that consumers would choose this sort of financing option. But it’s the simplicity of the process that makes this an attractive option. Typically, you need only proof of employment (a pay stub), a bank account, and a valid ID to qualify for this sort of loan. And when a sudden expense emerges, it’s a relatively seamless process. Of course, the problem is that a short-term $200 loan can quickly inflate to well beyond the initial cash. And for someone already strapped for resources, it’s a short-term solution that can present long-term problems.
Bank Loans
Some customers only want to deal with an institution that they know. They head to their nearest bank branch and wait their turn to talk to a loan representative. Chances are, if the customer is in good standing, they can walk out with a decent financial option. But here’s the catch— if you have a car repair that needs to get done right now, chances are you don’t have time to talk to a branch representative, fill out paperwork, and wait for the loan to come through. And if it’s the weekend, you’ll just have to wait.
Credit Cards
“Waiting for a new credit card application to process also doesn’t bode well during an urgent situation.”
Breaking out a credit card (or applying for a new one) seems like a perfectly good option for many. But the reality is that once that expense is executed, a customer may have maxed out a card (or two). That means they’ll need to hope that no new sudden costs come up. The safety net has been compromised. Waiting for a new credit card application to process also doesn’t bode well during an urgent situation.
DigniFi
DigniFi and DigniFi ExpressWay* provide a quick and easy two-minute application process that can be done instantly at a service center or repair shop through a mobile app or online. It’s faster than a credit card and more convenient than visiting a bank. Plus, customers can avoid predatory interest rates that some payday lenders work with. Some DigniFi benefits include:
- Competitive rates, low payments
- Interest waived for up to 6 months for ExpressWay cardholders and 90 days for installment loan customers
- Quick approvals and no money down get customers back to their lives quicker
- Twice the approval rates of the average credit card
- Advanced analytics take into account more than just FICO scores, so service centers/repair shops can approve more customers
- 5-star BBB rating increasing the possibility of overall customer satisfaction and loyalty—what businesses are built on
So, how do you talk to customers about their financing options? Learn more about how DigniFi can help service centers and repair shops close more deals, increase customer satisfaction, and improve bottom lines.