Providing your customers with approved financing can make the difference between losing or closing a sale. Key to that is providing lenders with the relevant information to help them assess someone’s ability to manage a loan. While a person’s credit score is one factor that’s considered, there can be more to their financial story.
Here are four factors that may be considered in addition to a customer’s credit score:
1. Income
An evaluation of a customer’s income helps provide reassurance that they’ll be able to cover their required monthly payments. Most importantly, proof of a consistent monthly income demonstrates the ability to meet those payments on an ongoing basis.
Proof of income may include recent pay stubs, monthly bank statements, or statements showing other income.
2. Debt-to-income ratio
A customer’s debt-to-income ratio helps demonstrate how much new debt they should be able to manage. It calculates how much of their overall income is already allocated to covering other financial commitments and how much is still available to cover payments on new debt.
This ratio helps determine the amount for which a customer may be approved.
3. Collateral (e.g., real estate, investments)
A customer who owns valuable assets may consider pledging them as security for their loan. These assets may strengthen a customer’s application or allow them to obtain a lower interest rate than they would get on an unsecured loan. It is important they understand that if they fall behind on their payments, they risk losing their collateral if it’s required to pay the outstanding balance of their debt.
Assets such as a car, a piece of property, or an investment account can be used as collateral.
4. History of responsibility
Demonstrating a previous history of stable payments and fiscal responsibility can help offset the impact of a temporary setback. For example, a customer may still qualify for financing if they can demonstrate their current low credit score is due to a previous job loss or the need to take time off to care for a family member during a health crisis. If they can show they are back on solid financial footing, they may still be approved for financing.
Bank and credit card statements can demonstrate previous financial responsibility.
No one wants to lose a customer because they weren’t approved for financing. Working with a lender willing to hear a customer’s full financial story, not just their credit score, can help turn more prospects into purchasers.
To learn more about how Aqua can provide your customers with flexible financing, contact us today at:
800-234-3663, option 4, ext. 6094
[email protected]
