How to Offer In-House Financing With Advanced Loan Software

In recent years, in-house financing has become a popular strategy for businesses and lenders alike. The speed, reliability, and convenience of in-house/white-label financing with an advanced LOS system make it an ideal option to simplify the purchasing process for customers.

Lenders might be wondering how to take advantage of in-house financing while leveraging its ease of adoption, applicability, and scalability. Let us walk through how in-house financing works, and how lenders can offer an in-house financing product for partners to better serve their customers.

What is In-House Financing?

In-house financing is the process of a business funding the purchase of a good or service to a consumer. This is typically done with high-priced items, like cars or homes, extended as a line of credit that the buyer pays the business back over time.

Also referred to as a “buy now, pay later” model, in-house financing enables businesses to provide easily accessible short-term credit to their customers. Lending institutions can offer their customers loans more directly, and therefore quickly, with in-house financing.

For instance, an auto dealership with high customer traffic can significantly reduce the time customers spend waiting for the dealership’s finance department to review tens to hundreds of loan applications before submitting them to a bank for credit approval.

In-house financing is fast, simple, and convenient, especially with the innovation offered by financial technology (fintech) and point-of-sale (POS) credit platforms.

In-House Financing for Lenders

In-house financing is a tactic that can be used by many industries, including auto, healthcare, furniture, and education. For these direct-to-consumer businesses, using an in-house financing with a customizable loan origination system (LOS) could be key. Essentially, a lender can become a white-label partner with our advanced software to streamline the loan approval process, improve internal team efficiency, and the overall customer experience of their business partners.

Expanding Loan Offerings With an Advanced LOS

As a lending partner, finding efficiencies for the loan origination and facilitation process is key to maintaining strong partnerships and providing great customer service. With an advanced LOS, not only are lenders able to help facilitate more in-house financing for auto, commercial, and consumer loans, but they are also able to increase volume and efficacy.

Let us take a look at a few particular industries in which lenders can surpass traditional financing routes with an advanced LOS.

Automobile Dealerships

Lenders can leverage advanced auto loan software to help dealerships and auto retailers to enhance their sales and improve customer satisfaction by:

• Lowering purchase barriers – Not many people have cash on-hand to purchase a vehicle that costs a few thousand dollars, meaning the average consumer must apply for a loan. In-house car financing lowers the barrier to accessing credit by traditional means and provides credit to customers to complete these purchases.

• Providing payment flexibility – By providing customers with a range of payment options, in-house financing enables car retailers to meet customers where they are comfortable regarding the frequency and affordability of monthly payments.

• Streamlining the buying process – Completing a purchase with in-house financing is much easier when it is all done in one place. When customers walk into a lending dealership, they can obtain credit directly and make the purchase more quickly.

Beyond these benefits, offering reliable in-house financing will help boost a dealership’s customer loyalty and incentivize customers to return for business or provide referrals. This makes facilitating lenders an instrumental partner in that process.

Furniture and Home Appliances

One industry that lenders can add value with an advanced LOS system is furniture and home appliances. Customers often need help with the hefty price tags on items like refrigerators or furniture sets. With consumer loan software, lenders can increase a furniture retailer’s bottom line by making these expensive items more accessible, especially when customers can choose their preferred payment option.

In-house financing also encourages customers to make larger purchases and take on projects like room makeovers. As a sales strategy, furniture and home appliance retailers can bundle these products into attractive financial packages, increasing the value of the purchase to the customer.

For loan providers looking to bolster loan portfolios or beat out competitors, leveraging a powerful LOS for furniture and home appliance customers can be a step toward growth.

Healthcare Services and Products

Healthcare businesses need lending partners that prioritize compliance to adhere to their strict regulatory requirements for loan processing. Healthcare facilities can benefit from lenders using a commercial loan software, which employs rigorous security and compliance standards alongside the unique flexibility to adhere to any clinic’s process.

And there is no doubt that the ability to offer in-house financing appeals to healthcare businesses. It also increases access to elective procedures that patients might not have opted for outside these flexible payments. When hospitals, clinics, or health centers offer in-house financing to their patients, they can accelerate patient volume and revenue, lowering the barrier to accessing healthcare. As a result, these institutions can increase their patient base and develop a steady and sustainable cash flow.

Education

This industry beckons for added efficiency in the loan servicing process. With an advanced LOS, lenders can help educational institutions streamline financing to take the stress out of borrowing for both students and lending teams.

Whether it is to fund one’s college education, a postgraduate degree, or another technical certification, in-house financing offered by an educational institution helps students receive the education they are looking for without experiencing financial stress.

Offering in-house financing to students to help them pay for their education also lowers the barriers to accessing educational opportunities. The institutions providing the funding can also optimize the flexibility of the payment plans, allowing students to pay when they can.

How to Offer In-House Financing With Advanced Lending Software

As a lender aiming to expand your loan portfolio and loan offerings, Fuse is built for you and your partners. Regardless of industry, the Fuse platform is designed to streamline the loan origination system workflow from start to finish, enabling lenders to provide credit fast and conveniently.

Fuse is scalable and customizable, meaning you can implement it across seasons of growth and industry lines without worrying about capacity limitations. With over 100 integrations, you can conveniently customize your loan origination software to meet your customers’ needs and maintain high satisfaction ratings.

And, as you grow your portfolio, Fuse helps you minimize human errors and capitalize on business efficiency—ensuring your processes work smoothly and your customers remain happy.

Request a demo to learn more about why Fuse is right for you.

Sources:

CFPB. What Are the Different Ways to Buy or Finance a Car or Vehicle? https://www.consumerfinance.gov/ask-cfpb/what-is-the-difference-between-dealer-arranged-and-bank-financing-en-759/#sources-for-auto-loan-financing

Equifax. Buy Now, Pay Later. https://assets.equifax.com/marketing/US/assets/bnpl-sustaining-growth-and-building-profitability.pdf