Lenders are always looking for ways to expand their clientele and increase the frequency at which they can capitalize on each consumer. One of the most popular new lending trends is instant installment loans offered at the point of sale. These offer a level of flexibility and convenience that is hard to pass up, and consumers have made increased use of them throughout the pandemic.
The rise in online shopping has obviously been one of the main drivers of the growth of instant installment loans, but the product itself offers benefits that make it attractive to consumers who shop brick-and-mortar as well. These flexible payment options give lenders the ability to capture customers that aren’t traditionally looking for financing right as their interest in purchasing is at its peak.
To help lenders understand why these payment plans are so significant, we are going to cover:
- What instant installment loans are
- The benefits of instant installment loans
- How to offer them to consumers
What Are Instant Installment Loans?
Instant installment loans are point-of-sale financing options that operate similarly to traditional loans. They offer a predictable, pre-determined funding plan that makes repayment simple and easy. The main differences between the two are that instant installment loans are specifically offered, approved, and finalized at the point of sale for a product or service.
This is what makes them such a great sales magnet for lenders: They get to capitalize on a consumer’s interest in a different product. Lenders already manage this in industries like real estate, automotive sales, and other sales settings, wherein obtaining financing is already the norm. These loans open up the same opportunity in smaller-scale retail and service settings.
The Benefits of Instant Installment Loans
While instant installment loans offer a ton of benefits to consumers, they offer even more potential for the lenders that offer them. The convenience and flexibility benefit both parties, but the potential for better profits lies with the lender.
The following are the key benefits of instant installment loans for lenders:
- Increased conversion
- Reduced customer acquisition cost
- Wider consumer base
By reaching out to consumers when they are already prepared to make a purchase, lenders can convert more leads. It is much easier to get consumers on board with financing when they are excited about what they are about to buy but have just been faced with the cost and are considering if that price is worthwhile. In many cases, instant installment loans can be the deciding factor.
This also creates a mutually beneficial relationship between the merchants that consumers shop with and the lenders providing the financing, making merchants more open to partnering with lenders for other financing options like credit cards, traditional loans, and leases.
Reduced Customer Acquisition Cost
Due to this beneficial relationship between merchants and lenders, it is easy to find merchants that are looking for lending partners, especially if lenders work with a third-party fintech provider that makes these connections for them. This operates as not only a new sales channel but also an extremely effective marketing channel that provides ROI for the lender.
This reduces the overall cost of customer acquisition by making a portion of it profitable, offsetting expenses on harder-to-convert consumers in other sales situations.
Offer Instant Installment Loans With Skeps
Skeps offers a comprehensive, end-to-end consumer financing platform that helps lenders and merchants connect with convenient and modern financing options. Working with an entire network of established lenders and a wide variety of merchant partners, we go above and beyond instant installment loans. We help lenders offer a few different types of consumer financing through third-party merchants, including:
- Instant installment financing
- Co-branded credit cards
- Consumer loans and leases
If you’re looking to partner with a forward-thinking fintech company that will get your financial products in front of as many consumers as possible, Skeps is the perfect fit.