Running a business is hard enough, but when you’re also responsible for managing loans and credit lines for your customers, it can be downright overwhelming. On one hand, you want to help them access the funds they need to improve their lives. On the other hand, there is always the possibility that they will default on their payments, leaving you out of pocket.
This is why it is so important to help your new customers manage their loans properly. Here are some tips on how to do just that.
1. Make Sure They Understand the Terms and Conditions of Their Loan
One of the most important things you can do to help new customers manage their loans is to make sure they fully understand the terms and conditions of the loan. This means informing them about the interest rate, repayment schedule, late payment fees, and anything else that could potentially trip them up.
When new customers understand the terms and conditions of their loan, they are much less likely to default on payments or otherwise fall behind. Also, be sure to explain the concept of compounding interest, so they understand how important it is to make payments on time.
2. Help Them Create a Budget
Paying a loan back is a lot easier when new customers have a budget in place. This budget should factor in their regular income, as well as any other debts they may have. Once you have helped them create a budget, go over it with them to make sure it is realistic and will allow them to make their loan payments on time.
If need be, suggest ways they can cut back on their spending in order to free up more money for their loan payments. Also, let them know that it is always okay to call you if they are having trouble making a payment – you would rather work with them to find a solution than have them default on the loan.
3. Encourage Them to Pay More Than the Minimum
While new customers are certainly not required to pay more than the minimum amount due on their loan, it is definitely in their best interest to do so. The reason for this is that paying more than the minimum will reduce the amount of interest they have to pay over the life of the loan.
The good news is that even an extra $20 or $50 per month can make a big difference. Just be sure to let new customers know that any extra money they can put towards their loan will be greatly appreciated.
4. Offer Flexible Repayment Options
In some cases, new customers may find themselves in a position where they are unable to make their loan payments on time. Rather than penalizing them for this, offer flexible repayment options that will work with their budget.
One option is to allow them to skip a payment or make partial payments for a couple of months. Another option is to extend the term of the loan, which will lower their monthly payments but increase the amount of interest they will pay over time.
The important thing is to work with new customers to find a solution that works for both of you. After all, it’s in your best interest to keep them happy and satisfied customers.
5. Help Them Stay on Track With Their Loan Payments
Once new customers have started making their loan payments, it’s important to help them stay on track. One way to achieve this is to give them a call a few days before their payment is due. Also, you can opt for a loan payment portal where customers can track their payments and see how much they have left to pay.
While there are many loan repayment portals available today, it’s important to choose the best and most reputable platform like the one provided by Payveris. This way, you can be sure that your customers’ data is safe and secure.
New customers can often feel overwhelmed when they first take out a loan. However, by following the tips above, you can help them manage their loan in a way that is best for them. In doing so, you will not only build a good relationship with them but also reduce the chances of them defaulting on their loans.