Consumer financing programs can be practical and successful options for businesses wishing to assist clients in finance purchases ranging from $1,000 to $10,000. Discover what consumer financing is and how it can assist customers in covering the costs of necessary or desired purchases. We’ll also see the best consumer financing companies that have programs for merchants and retailers.
What is Consumer Financing?
Customers can use consumer financing to make low monthly payments for a specified length of time on items or services that they would otherwise be unable to afford to pay for upfront with cash or a credit card. If you are a consumer seeking to make a large purchase, several companies and enterprises offer consumer financing. Businesses of all sizes can benefit from having a third party manage their financial collections, which is why many offer consumer finance as a payment option. This frees up time for businesses to concentrate on selling their products and solutions while offering exceptional customer service.
The Advantages of Consumer Financing Programs
There are numerous advantages to implementing a high-quality consumer financing program. Several consumer financing companies provide favorable terms, but not all of them offer the same perks.
Customers and businesses who use financial services gain from them. Individuals can use financing to pay for items monthly rather than in one lump sum. As you might expect, most people are unable to spend large sums of money all at once. By permitting monthly payments, a greater number of customers will be able to buy these expensive products. This is wonderful for customers who want to make a payment plan purchase, but it is also great for businesses who want to bring in new clients.
Advantages of Consumer Financing Customer
- Customers’ Long-Term Payment Plans
- More Potential Customers for Companies
- Excellent Method for Creating and Restoring Credit History
- Favorable terms from a number of high-quality financing firms
Advantages of Consumer Financing for Businesses
- Increased Sales and Business Expansion
- Increased Recurring Customers
- Customer Base Expansion
Advantages of Merchants Consumer Financing Programs
While businesses that offer consumer financing programs value the ability to assist merchants in paying for their products or services, consumers value the flexibility to make smaller fixed monthly payments with a clear end date.
A consumer in need of medical equipment, for example, can finance their CPAP machine or Portable Oxygen Concentrator (POC) today and make reasonable monthly payments for 12, 18, or 24 months. Nothing is more vital than being able to access equipment quickly in the case of a medical emergency. Consumers gain from not having a large upfront cost, and they will have peace of mind knowing they can pay the entire down in fixed monthly installments.
Merchants in other businesses can benefit from consumer financing as they have the option to pay the complete cost in monthly payments as well. Medical equipment firms, dental care providers, pet retailers, and in-home sale organizations are some of the companies that commonly provide customer financing schemes.
Why Should You Think About Using Consumer Financing Programs?
Consumer financing is an excellent alternative for companies of all sizes. Here are a few of the reasons why:
- The capacity to provide your consumers with an additional payment mechanism for your goods or services.
- A consumer financial services provider’s ability to handle monthly payments.
- Quick approval allows applicants to make same-day purchases.
- Easy access to an auto-pay service
Now that we’ve gone over some of the advantages of using consumer financing companies, let’s take a look at seven of the greatest organizations that offer this form of financing. We’ll go over a few key points, but we’ll summarize everything in the evaluations below. We will also present a detailed list of advantages and disadvantages for each of our choices.
Consumer Financing Companies to Watch in 2023
#1. PayPal Credit
In 2023, PayPal Credit will be one of the most popular client lending providers. They work with several well-known retailers. PayPal Credit enables customers to make purchases on sites such as eBay, Best Buy, and Target. Customers who meet the qualifications will be given an initial credit line with favorable terms. Customers will often get six months to pay off significant purchases with no interest. Purchases must cost more than $99 to qualify.
eBay is one of the most popular PayPal Credit shops, owing to the long-standing relationship between the two well-known businesses. Depending on the shop, customers may be eligible for additional credit line bonuses. Still, PayPal Credit’s broad flexibility is one of the reasons it has such a solid reputation with these online shops.
Pros
- Available from a variety of online retailers (eBay, Target, Best Buy)
- For the next six months, there will be no interest on purchases of $99 or more.
- Customers are eligible for credit line increases on a regular basis.
- There are no penalties for paying in advance.
Cons
- Not all customers will be approved for a credit line through PayPal Credit.
- After the promotional period expires, there will be a high interest rate.
#2. ViaBill
Another popular consumer financing option for customers to consider on qualifying websites is ViaBill. This platform is intended to break down larger purchases into four equal monthly payments. If you make each of your four monthly payments on time, you will pay no additional interest on your purchase.
Customers can also rest assured that ViaBill uses safe and secure servers to safeguard their personal information. ViaBill is already integrated into over 5,000 businesses and is constantly expanding to new platforms.
Pros
- Make four separate monthly payments to pay for large purchases.
- If the purchase is paid in full and on time, there will be no additional interest.
- Customers are extremely safe and secure.
Cons
- Not All Customers Qualify
- Some well-known retailers do not accept ViaBill’s consumer financing.
#3. Afterpay
Because of its excellent reputation among customers and retailers, Afterpay is a very popular option for client financing. Customers can divide larger purchases into separate monthly payments without incurring any additional interest. So, customers who fail to pay their monthly bills on time will be charged late fines. Customers may also be able to reschedule their monthly payments a couple of times per year.
Customers that use the Afterpay consumer financing platform are particularly popular among online apparel merchants. So, customers will almost probably be able to use Afterpay when making large purchases at authorized retailers. Simply use the ‘Afterpay’ checkout option to receive an instant eligibility notification.
Pros
- If you pay on time, you won’t have to pay any interest.
- If you pay on time, you will not be charged any further fees.
- Notification of Immediate Eligibility
Cons
- Several online retailers are not supported.
#4. Affirm
The Affirm financing process is highly user-friendly. You can quickly select their platform at an eligible retailer during the checkout process for an instant decision on eligibility. If you are eligible, you will be notified of your projected monthly payment for your purchase.
This platform is specifically developed for customers who prefer to pay for their goods later. Customers can choose their desired payment date, and there are no late penalties or additional penalty fees.
Pros
- There are no late or penalty fees.
- Customers have the option of selecting their preferred payment schedule.
Cons
- Retailers don’t have a lot of them.
- Customer Service Is Limited
#5. FinanceIt
Finance is without a doubt one of the most well-known client financing platforms. Rather than paying huge upfront fees, you can considerably lower your initial costs and pay for larger items over time. Following the completion of your application, you will receive speedy approval decisions.
The interest rate on your purchase loan will be determined by your credit history. Promotional deals appear from time to time, but they do not appear to be as generous as some of the other sites we have examined.
Pros
- Decision is instant
- Loan Application Process is Quick and Easy
- Offering Regular Monthly Payments with a Customized Schedule
Cons
- There are no promotional interest rates.
- Some of their interest rates are exorbitant.
#6. United Consumer Financial Services. UCFS
UCFS is a fantastic consumer financing company that has swiftly developed across dozens of well-known organizations and industries. They work directly with business owners to give an optimal solution that helps them grow their business by giving client financing.
Pros
- Available for a variety of popular retailers
- There’s an online application process.
- Has a basic bill payment system
Cons
- Does Not Provide Direct-to-Consumer Financing
#7. Amazon Credit
Amazon Credit offers several intriguing benefits, but this financing solution is only available on Amazon’s website. There are three basic promotional periods with differing purchase requirements: 6-Month, 12-Month, and 24-Month. If the purchase is completed within the financial, promotional term, special financing will offer 0% APR.
Amazon Credit also has no annual fees and no fraud liability for customers. Customers can also get cash back when they use the Amazon Credit line to make an eligible purchase. In addition to all of those amazing bonuses and benefits, consumers who are approved for the Amazon Credit financing special offer may be eligible for a $40 Amazon Gift Card.
Pros
- Eligible customers will get a $40 Amazon Gift Card as a thank you for their approval.
- Amazon Credit Promotional Offers in Three Varieties (6-Months, 12-Months, and 24-Months)
- Consumers pay no annual fees and have no liability for fraud.
- There are instant credit decisions available.
Cons
- Financing is only available on Amazon’s website.
Consumer Financing FAQ’s
What are the different types of consumer finance?
Mortgage lending, student loans, automotive loans, credit cards, and payments, payday loans and other credit alternative financial goods, and checking accounts and substitutes are among the key consumer financial markets.
What is an example of a consumer finance account?
Payday loans and other loans with extremely high interest rates are also instances.
Are consumer finance loans bad?
Consumer finance loans can be harmful to the economy because many consumers are unable to meet the high interest rates and loan payments.
