Tools to Help Card Members Pay Down Debt Faster
When people create more debt than they can handle, they often find themselves looking for solutions to pay that debt off more quickly or to pay less to make it all go away. Unfortunately, this sometimes means that borrowers turn to resources other than their banks or lending institutions for a solution. When it comes to finding tools that help cardmembers pay down their debt faster, you want them to come to you. Below are a few ways you can reach out to help when you see your cardmembers start to get underwater.
Debt Consolidation Offer
One thing that often stresses borrowers out is a high APR. Watching their balance slowly tick up even when they’re doing their best to make payments can be disheartening. Additionally, if your borrower already has a debt with you, there’s a good chance they have debt with someone else, too.
Offering your cardmembers a consolidation loan or card with a low or zero APR could be the catalyst they need to get the debt paid off. Plus, if you allow them to transfer all their debt to you, it could help create a loyal customer for life.
Sometimes this can be a risky move, though, so be sure that you’re prepared to take on that risk before offering this type of program.
One of the best ways to give cardmembers the tools to pay off their debt quickly is to provide credit counseling options.
Credit counseling provides a few different solutions for cardmembers to help them avoid bankruptcy, pay off their debt, and rebuild their credit:
· Budget and income review – Sometimes helping people pay down their debts more quickly is as simple as working with them to restructure their budget or figure out where they can bring in passive income. This is where credit counseling agencies usually start. It benefits both the lender and the debtor.
· Regular educational workshops –While one credit counseling session is often enough to set up a plan for the future, continuing education is always preferable. That’s why some CCAs offer free materials and workshops to help keep borrowers on track for the long-term.
· Debt management plans (DMP) – These plans help borrowers consolidate their debt without taking out an additional loan or line of credit. Instead, all the payments go through the credit counseling agency (CCA), often reducing the overall amount that the cardmember has to pay. This is often a last resort for borrowers before bankruptcy.
Recommending credit counseling early is a show of good faith to your cardmember and can save you money by avoiding having your client file for bankruptcy.
Consolidating Client Repayment
When you’re offering resources for your cardmembers to repay their debt faster, you want to be able to monitor and expedite every part of the process, from giving them resources to find the best CCA for them to automating a DMP for faster response times.
Peregrin’s process solutions for lenders gives you the tools you need to show your cardmembers how they can pay down their debt more quickly. You can learn more about our customized solutions here or give us a call today at 1-800-231-2493.