Throughout the repayment period, borrowers can understand their options, respond when circumstances shift and manage their loan with the help of ongoing customer support
Once an application is approved and money has been paid out, many people assume the process of borrowing is complete. Up to that stage, information on eligibility, applying, loan terms or paperwork may come from a lender’s customer service team.
Even after approval, however, what continues to matter is customer support.
Within the UK’s regulated lending environment, the obligations of responsible lending reach further than the first decision to offer credit. Over a loan term, the circumstances of a borrower can shift, and at any point questions may emerge about repayments, settling early and other parts of an agreement.
Throughout the relationship between lender and borrower, an important role can therefore be played by customer support that is accessible and continuous.
After Approval, a Borrower’s Circumstances May Shift
When someone applies, a key part of judging whether they can reasonably manage a loan is the affordability check. Yet clearing that assessment is no guarantee that, across the whole repayment period, a person’s finances will stay unchanged.
A borrower’s finances can be affected by shifts in employment, health, household bills and the broader cost of living.
Even a person who could comfortably meet repayments at the start of a loan might therefore see a change in their financial position before the term ends.
For this reason, borrowers who think repayment problems may lie ahead are urged by many lenders to get in touch at the earliest opportunity.
Before payments are missed, asking for help during financial difficulty can allow borrower and lender alike to talk the situation through while payment problems are still less serious.
Once told about a change in circumstances, a lender may be able to talk through suitable options, depending on the individual position of the borrower, its own policies and the applicable regulatory requirements.
Beyond Financial Difficulty, Customers Still Benefit From Support
Borrowers who face no financial hardship can also find value in support after approval.
Over the course of a loan, a customer might want to know the effect of making an extra repayment, whether early settlement is possible or how the total interest paid could change with an overpayment.
Such decisions can be easier to understand with access to an experienced adviser.
Preferences for how to communicate may also vary between customers. Offering help by email, telephone, secure digital messaging or online chat can give borrowers a clearer route to raising questions and getting information at the moment they need it.
When someone is anxious about their finances, accessible communication can be especially valuable. A borrower who knows who to call and what help exists may be less inclined to put off asking for it out of uncertainty over how their lender might react.
Earlier Conversations Can Follow From Good Customer Service
Borrowers gain from customer support that continues across the repayment period, but lenders can also use it to build stronger and more transparent relationships with the people they lend to.
Knowing where to turn for help, borrowers may be more inclined to voice concerns early on.
Lenders may then have a chance to learn what has happened and, where suitable and in line with their policies, explore possible solutions before arrears build up.
Just as important is the quality of that communication.
Quick answers to simple questions can come from digital account services and automated FAQs, but in some situations what is needed is a more personal approach.
A level of support that automated services cannot always match can come from advisers trained to discuss sensitive financial or personal matters, set out loan terms plainly and listen closely to what concerns a customer.
Independent Help May Be Needed by Some Borrowers
In some cases, too, the most suitable source of help may not be the lender’s in-house customer service team.
Strong support standards can involve pointing borrowers to charities and independent organisations offering free guidance on money and debt.
For vulnerable borrowers or those in more serious financial distress, directing customers to outside support can matter especially.
It accepts that some money problems may call for specialist help beyond what a lender can offer directly, and it helps consumers find organisations that could be better suited to supporting their individual circumstances.
Once Funds Are Released, Responsible Lending Continues
How customers are treated for the whole duration of a financial product has also come under greater focus because of regulatory expectations. Within the broader framework of rules that govern regulated lending for firms active in the UK consumer credit market sits authorisation by the Financial Conduct Authority.
Among lenders authorised by the FCA, the Consumer Duty has strengthened the expectation that firms aim for good customer outcomes across the entire relationship, rather than concentrating mainly on the moment a product is sold or a credit agreement starts.
Lenders therefore need to see responsible lending as wider than an affordability assessment ahead of approval or the provision of information on interest rates, charges and comparable products.
Across consumer credit products, short-term loans included, the same principle holds.
Borrowers can stay informed about their agreements, especially as their circumstances shift, through clear communication, accessible customer service and prompt answers to questions.
Digital Convenience Alongside Personal Support
For borrowers, information about their loans has become easier to reach thanks to technology.
Customers can check forthcoming payments and outstanding balances through online account management systems, and consumers can gather information before applying for credit using eligibility checkers and comparison tools.
Digital services and personal customer support, however, need not be substitutes for each other.
Based on the principle that handy online tools and access to experienced advisers can work together, some regulated UK lenders keep investing in customer service as well as digital technology. UK direct lender Cashfloat, for example, pairs digital access to its lending services with continuing customer support.
Routine account management can be made more convenient, and simple information reached faster, through automated services. Where a question is more complex, however, or a borrower needs to talk through personal circumstances in confidence, a conversation with an experienced adviser can still hold value.
The Borrower-Lender Relationship Includes Ongoing Support
Deciding whether to approve an application is not the only concern of responsible lending.
Also involved are suitable standards of communication across the life of a loan, and making sure borrowers know where to go for information or support.
Better placed to stay engaged with their borrowing are customers who know how to reach their lender, grasp what their repayments require of them and feel confident enough to seek assistance when circumstances change.
Keeping support accessible from application right through to the last repayment is therefore, for lenders, a key element of delivering a responsible lending service focused on the customer.
