The increasing competition in the lending industry has made it essential that lenders should tap those sources of profits that were earlier considered untouchable – i.e. the subprime lending option. One of these options are applicants who have faced a bankruptcy in their past. Usually, most lending institutions wish not to touch cases where the applicant has filed for a bankruptcy or has had repossession. Although the latter case suggests that the applicant has had a history of failed payments, filing for a bankruptcy doesn’t suggest that the applicants cannot be taken as genuine auto finance leads.
It is a common belief that bankruptcy happens in very rare cases but after the recent economic depression, these rare cases increased twenty times than the usual percentage. However, all bankruptcies don’t occur due to mismanagement of finances. Some people file for bankruptcy due to a medical problem, divorce settlement or taking a hit due to the market. In these auto finance leads, the lender should check the record of the applicant before the bankruptcy was filed. If the record has been good before the crisis period, then it is safe to assume that the consumer would be able to pay back the loan.
These auto finance leads are beneficial in more than one way. The first benefit is that the lender gets to give out more finances at a higher rate of interest. Another one is that it increases the consumer’s trust in the lender. Due to the bankruptcy, these individuals usually believe that no one would approve them the finances and when they are provided with the money, they pay it back gratefully. After all, it is a chance for them to improve their credit score.
Tags: Auto Finance Leads