7 reasons why your loan business struggles to attract borrowers

So, you’ve kicked off your loan business. We believe congratulations are in order. Now, you’re expecting a surge of customers. You’ve hustled with ads and showed up relentlessly on social media. Despite your best efforts, the expected influx of customers hasn’t materialized, leaving you uncertain and, perhaps, with a touch of frustration.

Let us help you figure out reasons why your loan business isn’t borrowers’ top choice and how you can turn the tide in your favour.

Not good enough loan offer

While it’s easy to get overclouded with bias and think you offer the best loans, your customers may not think so; high interest rates, hidden loan processing fees, and equivalents may deter borrowers from choosing your loan business. Uncertain terms and conditions may confuse and reduce trust in your services. It’s important to communicate openly and ensure that borrowers understand entirely the terms they are agreeing to.

Poor customer experience

If the channel you use (Mobile app, Web app, USSD etc.) offers a shitty customer experience, borrowers are likely to exit midway and never come back to complete their application process. For example, If Dara is applying for a BNPL loan from XYZ Lending Co., but halfway through, she realizes she inputted the wrong details for her work email. Still, XYZ Lending Co.’s Mobile app doesn’t allow her to backtrack without losing the other information she’s completed. The chance of Dara completing that application process is next to zero. If your app has a confusing interface or unclear instructions, borrowers like Dara might get frustrated and give up, causing your loan business to miss out on potential opportunities, which means a missed opportunity for your loan business.

Buggy app or website

If your app or website is experiencing a technical bug issue that’s making the onboarding process of your borrowers 10 times more difficult to complete. Best believe they’ll opt for your competition — bugs such as redirecting them to suspicious web pages, time-out sessions, longer load times etc. To genuinely assess how well your app or website onboards new borrowers, we recommend applying for a loan incognito using your personal email or details occasionally and actively seeking feedback from customers to identify any potential glitches or areas for improvement.

Rigid loan terms

When your loan terms and conditions are rigid and fail to adapt to the diverse financial situations of your target market, it can hinder their willingness to engage. Create room for adjustments tailored to the market you serve and, most importantly, the individual borrower applying. Consider offering personalized interest rates based on the borrower’s creditworthiness to make the lending process more inclusive and fair. On top of that, offering flexible repayment periods helps accommodate diverse cash flow patterns, promoting a borrower-friendly environment and improving overall customer satisfaction.

Unresponsive customer support

How swift is your response to prospects? Does it take minutes, hours, days, or even get lost in the mail? When borrowers encounter delays in response to their queries, it negatively impacts their overall experience. It may cause frustration and a lack of trust in your loan business. Prompt responses increase customer satisfaction and indicate your dedication to providing exceptional service. In today’s fast-paced digital world, timely communication is essential in retaining and attracting customers.

Inflexible risk assessment criteria (RAC)

If the standards for evaluating borrower risk are too strict and inflexible, potential borrowers who could benefit from your loans may be excluded, resulting in fewer people engaging with your loan business. Lendsqr lenders, however, can customize the RAC that’s a right fit for their target market at any time. This flexibility implies that a broader range of borrowers from various financial backgrounds can access credit through your loan business.

Negative customer reviews

When people hear about bad experiences from others, they might think twice about borrowing from your loan business. That’s why we highly recommend resolving disputes, stretching olive branches and pacifying aggrieved customers as much as possible. You can also counter bad reviews by actively seeking and highlighting good reviews from borrowers who had a positive experience with you showcasing testimonials on your website and social media platforms.

Broaden your customer pool

It’s easy to wonder why your customer pool isn’t as deep as you’d like. But let’s keep it real. Maybe your interest rates and loan offers aren’t cutting it, or the loan process feels like a marathon. Perhaps folks just don’t know you exist or can’t get through to your customer support. It happens.

So, what now? Take our advice above and make those necessary changes: tweak those rates and offers, fix that bug, improve your customer support response time, be sensibly flexible with your RAC and keep showing up. And who knows, maybe your next borrower is just a simple change away. Cheers to more borrowers and fewer head-scratching moments! To learn more about being borrowers’ top choice, send us a message at growth@lendsqr.com.