Newpay versus instalment loans: what are the key differences?

Multiple applications; no repeat spend capability. These are just two of the disadvantages associated with traditional instalment loans. But Newpay allows retailers to offer a superior customer experience.?

Customers often use instalment loans at checkout to help them buy big-ticket items like furniture or white goods. These are helpful because they enable large purchases to be split into fixed monthly repayments and typically charge a lower rate of interest when compared to a credit card or other forms of credit. In short, they can help customers to budget. But whilst instalment loans are undoubtedly useful, there are downsides.?

For example, they normally require customers to pay an upfront deposit and some lending providers will only offer a certain duration of repayment plans with no flexibility.

Lack of repeat spending capability is also another downside. When customers apply for an instalment loan, they complete a form and undergo a full search on their credit history. But the application is just for that one purchase without offering customers the ability to use the product to make other purchases in the future.?

Although many lenders have recently attempted to improve their application journeys, it can still be a time-consuming process, even more so if the customer intends to make multiple purchases. While historically customers were willing to jump through hoops to access credit, expectations have changed over the years and customers now demand more.

The Newpay way?

Newpay is an alternative form of retail finance. It offers customers payment flexibility and helps them to spread the cost of small and large purchases, while consolidating multiple purchases into a single monthly repayment, making the repayment process easier and more convenient.

Once Newpay customers are approved for their first purchase, they receive a credit limit for all their current and future purchases, avoiding the need to have a new application for credit approved each time they spend. It is a time saver, it offers repeat spending capability, and it improves the shopping experience.

Newpay also offers flexibility on duration of repayments. When purchasing an item, customers can choose to repay in instalments over a period of 3 to 36 months.?

Finally, Newpay offers a seamless customer journey. While some other lenders might redirect customers off the retailer site, which can be confusing, our integrated application journey allows customers to apply for Newpay without ever leaving the site.

Overall, a better experience for customers and a great way to help retailers achieve stronger customer engagement, drive repeat purchases and attract higher spending.