What is Home Improvement Finance?
Thursday December 23rd, 2021
Every homeowner dreams of making their property the most comfortable, eye-catching and valuable place it possibly can be. But making that happen can be expensive, and potentially far beyond the means of many people.
That’s where home improvement finance comes in, making the financial commitment of any major project much more manageable for those unable to commit to an up-front cost. So what is home improvement finance? In this post, we’ll explore home improvement finance in more detail, and how you can offer finance to your customers.
How does home improvement finance work?
Home improvement finance works very similarly to other kinds of finance, such as those that people might take out to buy a car. Once the price of the job in question is established, a finance agreement can be struck for exactly the right amount, with customers repaying the balance over the agreed term (along with interest as applicable).
Within reason, there is no limit to the kinds of home improvement projects to which finance could be applied. Windows, doors, conservatories, extensions, decorating, driveways, landscaping, central heating, kitchens, bathrooms – the list is virtually endless.
Why home improvement finance could get you more customers
Home improvement finance can be instrumental in helping you bring more customers into your business. For starters, it significantly widens your potential customer base, beyond those who can afford to pay upfront, and including anyone who can qualify for finance.
Even just offering finance can be a major selling point for your business, too. The British public have always valued good tradespeople who are reliable, flexible, and able to work with them to get the project they want at the right price. Being able to provide finance highlights this flexibility and can stand your business out from competitors that don’t.
How do home improvement loans work?
There are some technical considerations to take into account when setting up and offering home improvement loans.
Firstly, it needs to be decided for each loan whether it’s secured or unsecured. Secured loans will have some collateral listed which can be offered up as an alternative in the event that the customer is unable to pay normally. For home improvement works, the home itself is the most common collateral lodged. Unsecured loans don’t involve any collateral being lodged, but because of this, there are far more stringent checks in ensuring that the customer can be relied on to pay, and so fewer people tend to qualify for these.
The other main factor is the credit score of the customer. This will affect the maximum amount that they are able to borrow, the length of the repayment term and the interest rate that’s applied. Customers will need to check their eligibility before committing to work, and certainly a good credit score will be required for any finance that’s unsecured.
How to offer home improvement finance to your customers
The easiest way to offer home improvement finance is to connect it directly to the quotation and ordering process. Without this, either you or the customer has to go through a separate procedure of looking for suitable finance, confirming eligibility and applying for it. This can be a time-consuming exercise, and ultimately could end up being a waste of everybody’s time if it eventually turns out that the customer can’t get finance anyway.
This is where technology plugged into your website can make every part of the finance offering so much easier and much more practical. Customers can add finance to their order in much the same way as they would click to add goods to their online basket. Eligibility and terms can be established automatically and the finance can be approved hand-in-hand with the purchase itself. From your perspective, everything is taken care of, and you can schedule in the work safe in the knowledge that your finance partner has made sure that you get paid in full.
Book a free consultation
The best way to provide home improvement finance to your customers is through Duologi, the technology that makes the process flexible and easy. To find out how you can make Duologi work for you, get in touch with our friendly team today and arrange a free consultation.