Do You Need To Offer Credit Insurance To Your Borrowers?
As a lender, you know that you're taking a risk each time you give someone money. No matter how well you've vetted their credit history and ability to repay their loan, you're betting on their ability to be able to pay you back, plus interest. It's a good idea to offer credit insurance to your borrowers.
Credit insurance ensures that you continue to get the money you've lended even if your borrower is no longer able to make payments. While researching credit insurance for banks, lenders, and investors, you may be wondering whether you can require your borrowers to take you up on your offer of credit insurance. In a word: no. You can, however, strongly suggest that they go through the credit insurance companies that you suggest in order to protect themselves in the event of unforeseen circumstances that stop them from being able to make their payments. Many people do not consider that they could be laid off, go through a natural disaster, have a family medical emergency, or otherwise be unable to keep the promises they've made to their lender.
When your borrowers go through your suggested credit insurance companies, both you and your borrower benefit. You get to continue receiving payments, even if your borrower is not able to make those payments on their own. Your borrower is protected from a declining credit score, which can save them financially in the future.
If you're searching for more information on credit insurance for banks, lenders, and investors, know that you're making smart moves to protect your business. Reach out to Prudence Insurance Brokers LLC today to learn more about how our credit insurance options can help keep your business safe.