What is interest bearing credit?
Interest bearing credit works in a similar way to a traditional loan. Customers receive their goods straightaway but pay for their purchase over a set period by making a series of equal monthly repayments.
Interest will be charged at a fixed rate, helping customers manage their outgoings as they’ll always repay the same amount each month.
Benefits of interest bearing credit
Reach more customers
Encourage both new and existing customers to choose you. Allow them to spread the cost of their purchase and give customers more confidence at the checkout.
Increase average transaction value
Upgrading or adding to their basket won’t seem like such a big expense if your customers are spreading the cost rather than finding the money upfront.
Offer flexibility on payment terms
Interest bearing credit allows customers to spread the cost of a purchase over a longer period – up to 120 months. Ideal for those looking to make lower monthly repayments.
For those looking for a cost-neutral option, interest bearing finance could be the solution for you.
The interest rate customers are offered is chosen and fixed by you, the retailer. All customers who choose a comparable product will be charged the same rate. There’s no distinction in rates based on a customer’s creditworthiness or affordability (though this will, of course, be assessed during the application process).
If you choose not to contribute towards the cost, the customer will pay interest to us directly as part of their monthly repayments. In this case, offering retail finance won’t cost you a thing.
Alternatively, contributing towards the cost could, in some cases, bring the APR down for customers. This could make interest bearing finance a more attractive proposition, helping to increase conversions.
How to choose the right option for your business
You may be considering whether to offer interest free or interest bearing credit – or perhaps both. While interest free finance is an appealing option to customers, allowing them to spread the cost without any extra cost, retailers will be required to pay a subsidy. Interest bearing finance charges the customer low levels of interest to cover some or all of your subsidy charges – making it a potentially cost-neutral option for your business.
We work with over 3,000 leading retailers across key sectors including leisure, furniture, home improvements, electrical and jewellery. Our team of highly experienced specialists will help you to discover which retail finance options are most suitable for you.
Choosing Novuna Consumer Finance
Work with one of the UK’s leading point of sale credit providers to offer interest bearing credit to your customers. Here are just some of the reasons you should choose Novuna.
Interested in becoming a retail finance partner?
If you would like to enquire about becoming a retail partner, please complete the short form, and one of our team will be back to you within three business days.
You will need to confirm you can meet all of the following criteria:
- Minimum of £2,000,000 in annual sales turnover
- A minimum of 2 years trading history
- Be trading profitably
- A minimum net worth of £25,000, unless your business is within the Home Improvements market then a minimum of £100,000 will be required
- The products you offer are for consumers and NOT for businesses
Retail Partner helpline
If you are an existing retail partner with a general enquiry, please call our Retail Helpline:
Retail Helpline opening hours:
08:45 - 18:00 Monday to Friday
08:45 - 18:00 Saturday
10:00 - 18:00 Sunday
If you're a customer looking to speak to someone about your existing retail finance or personal loan agreement, call our Customer Helpline:
Customer Helpline opening hours:
09:00 - 18:00 Monday to Friday
Closed Weekends & Bank Holidays