Delinquent loans 연체자대출 are problem for lenders of all sizes. While a certain level of loan failure will be calculated on the performance of each lender, if this rate rises significantly, it could have serious consequences for your business, including additional collection costs and known risks. While lenders tend to place late payments, very few lenders realize that simple improvements in the payment process can significantly reduce late payments.
We have compiled five guidelines on how to improve payment quality and reduce credit crunch. But first, a little context of what makes a borrower miss out on payments. Generally, there are two reasons why a borrower is unable to pay:
- They have no money to pay
- They have money, but they can’t afford it.
They do not block successful loan repayments
Considering the above, we can assume that one or more of the blockchain prevents the borrower from making a payment. We asked 400 lenders, all of whom have lost their repayments, as to why they missed the deadline:
- 34% experience technical difficulties when trying to pay
- 32% did not know the date of maturity
- 21% did not know how much to return
- 21% did not understand at all that they should pay
This means a lot about the current state of loan repayment, but the strategies below can help you remove these barriers and improve your crime rates.
1. Provide low payment methods
As mentioned above, one of the main reasons for non-payment is the simple technical glitch, and when it comes to failed payments, not all methods are the same. Credit cards, for example, fail in 5-15% of cases. This is because it is possible for a credit card expiration or cancellation after a loss or theft. Recovery rates for other methods, such as direct debit, are very low. While some payments are still unsuccessful, the success rate for GoCardless direct payments reaches 97.5% in the financial services sector, but can reach 99.5% after repeated payment attempts.
2. Act quickly with great visibility of payments
We mentioned earlier that not all payments are the same. This is also very true if you are trying to get better visibility and detail in all your payment methods. Although most of your borrowers make effective payments ahead of time, if you can’t tell who hasn’t paid, you can’t do anything.
3. Provide the borrower with accessible and accurate payment details
In a recent GoCardless survey of more than 400 borrowers, 91% of respondents found it important to be able to see the status of their payments. When you look at your service, can a borrower, without speaking directly to one of your product staff, be able to determine exactly how much to pay, how much to pay, and when to pay each? The answer is no, then you have a serious obstacle to your success.
4. Create a clear plan of payment reminders for every step
For most lenders, reminders only appear when the loan has expired. By taking one step and reminding borrowers before the agreed payment date, you can reduce the chances of unpaid payment. To maximize the effectiveness of this method, offer payment reminders using your existing means of contact with the consumer in question, including SMS, in-app messages, email, email, or a good call to those at high risk.
5. Make it easy to try to pay for failures and misses
While the above strategies aim to reduce the rate of loan failure, some payments will still fail. As mentioned above, payment may fail for a number of reasons. The most obvious solution is to try to pay again, but this can be difficult depending on the payment method.