When planning for your future, it’s only natural to be thinking of and working toward big financial milestones. Buying a car, purchasing a home, or taking out a business loan are all huge accomplishments. But the vast majority of people have to borrow money from lenders to make them happen.
That makes the relationship between lenders and their clients incredibly important and financially intimate. To ensure accuracy, lenders need to know many details about their client’s personal finances. From debt and credit scores to long-term goals, many aspects are discussed. That also leaves room for questions, possible confusion, and the need for support to make decisions confidently.
It also makes establishing trust a vital component. Lenders want their clients to feel happy about their decisions and empowered by the steps they’re taking. Here are a few ways to make that happen.
1. Highlight Important Details Upfront
In a perfect world, everyone would read every word of every contract they sign. But the reality is that most people skim contracts at best. While that can work in some situations, it typically leaves room for overlooked requirements. That can cause confusion about terms and frustration that accompanies feeling misled. For lenders, the knowledge gap makes life a lot more complicated.
To help prevent clients from overlooking important details, create a plan for knowledge sharing. Look over your lending process and identify a few areas that are the most important for clients to know. If they need to provide their credit report, share how they can access it. Go over what your verification of income process looks like. Talk them through any fees or potential repercussions of late payments.
These topics may seem second nature to those who work in lending all day. But you’ll have clients with all kinds of financial backgrounds and experiences. Proactively covering frequent concerns makes asking questions more natural and less embarrassing for your clients. Not to mention, taking the extra step to make the process as clear as possible can help empower more informed decisions. And that can only lead to happier clients.
2. Provide Financial Education Tools
Some lenders just focus on getting the job done and have borrowers sign their specific contract as a one-and-done deal. That’s definitely one way to do it, but it may not be the best approach. Lenders who explain how a contract can affect the big picture stand apart.
Providing an explanation that ensures borrowers understand the personal finance decisions they’re making can help the relationship in the long run. It’s a value-add to share financial resources proactively during the lending process. The effort shows a level of care that is appreciated and immensely beneficial for all parties involved.
There’s no need to become your client’s financial adviser. Simple topics that can help them make big financial decisions are really all it takes. Think of credit, budgeting, and interest rates as good places to start. Throw in explanations of acronyms — like a debt-to-income (DTI) ratio — to make things even more clear. It’s even better if you can share information in multiple ways for different learning styles like print, digital, and video.
The real goal is to make sure your clients have a holistic understanding of the financial decisions that can impact their lives. From impulse purchases to late payments, it all contributes to their financial situation. But lacking an understanding of financial basics can create a less-than-desired lending experience. Being the lender that shares financial tools can instill confidence and make for an efficient and effective process.
3. Make it a Personal Experience
Although deals are about securing financing, the business of facilitating contracts is about relationships between people. Clients are making substantial financial decisions and don’t want to feel like they’re just a number to you. Creating a supportive and respectful experience for clients can only make them more comfortable. And that comfort level reduces the potential stress of the process, helping make clear decisions more likely.
Take a personal approach to cater to your client’s needs specifically. If they’re anxious about a decision, speak in plain language to explain it. Refer them to resources that can help ease their anxieties and instill confidence. Make recommendations based on what past clients have been happy with to provide reassurance.
Being available to answer questions and ensuring you’re responsive can help humanize the lending process. Remember the point isn’t to bombard clients with an abundance of information and leave them to fend for themselves. It’s to make the business-focused, transactional process feel more like a human interaction. And hearing more context can create a moment of clarity that can establish a mutually beneficial lending contract.
Ink the Deal
As a lender, your client’s feelings toward the deal they sign are paramount to a job well done. And being informed about the details, understanding the bigger picture, and establishing trust is the route to get there. Taking proactive steps to prioritize your clients and their understanding of the deal will make you stand out. That kind of reputation is what every business desires.
Of course, it’s normal for clients to feel nervous about signing deals to acquire large assets. There’s a lot of pressure to make the right choice, and high amounts of money are at stake. But being informed and prepared by lenders can ease that anxiety. So, instead of sitting around questioning decisions, clients can celebrate their accomplishments and be excited for the road ahead.
