Subprime recreation lending can help your business increase sales and serve more customers. This kind of loan enables you to finance potential customers with credit challenges like bankruptcy, collections, and tax issues.
Subprime is a type of loan offered at higher than typical rates to people who are unable to qualify for lower rate loans and are considered to be a higher risk due to credit issues. However, it also provides a good opportunity for these people to rebuild damaged credit.
Qualifying for a loan depends on many different factors, including income, credit score, assets, and payment history.
In many situations, subprime borrowers have issues in one or more of these areas, such as the inability to prove their income, or a poor credit rating. They may also have a poor payment history with individual accounts or outstanding collections from healthcare bills.
Recreation dealers can have more of these customers approved for loans with a subprime lender, which is a competitive advantage in today’s market.
What Are Subprime Loans?
Someone with a low credit score (usually below 660) may not be approved for a traditional loan through a bank. However, this borrower may still qualify for a loan at interest rates that reflect the higher risk. Subprime loans can be a useful alternative to standard financing for some borrowers.
In spite of the higher costs, subprime loans can help potential buyers get access to the recreational vehicles they want, and also help them become eligible again for prime loans.
Subprime Loans Increase Dealer Opportunities
Subprime recreation lending helps dealers finance customers with past credit issues. As such, there are more opportunities for recreational vehicle ownership when subprime loans are made available.
Subprime loans offer a win-win for both customers and dealers. Customers can begin to rebuild their credit history with timely payments. These loans are also profitable for dealers because they gain the advantage of increasing sales and revenue.