Smart Money sees consolidation trend post-COVID
Specialist packager and distributor Smart Money has reported a surge of broker enquiries for clients who want to better manage their family budgets due to the financial consequences of COVID-19.
According to Paul Crewe (pictured), managing director at Smart Money, the business is seeing more personal budget financial management enquiries than traditional straight debt consolidation requests.
Crewe said: “When we talk about debt, we tend to lump everyone together who cannot support their current expenditure.
“Consolidation loans are tailormade for a second charge application and while those are increasing, many more recent enquiries are on behalf of clients looking for options as to how they can manage their budgets better.
“Incomes have dropped due to furlough or been lost temporarily as businesses have cut back, but costs have stayed the same and broker customers are looking to see how they can reduce their monthly outlay to better match the new income reality.
“These applicants would not consider themselves to be ‘in debt’ when in normal circumstances they can easily afford their outgoings.
“Our expertise lies in working with our broker introducers to look at where a second charge mortgage can actually help by going through the customers’ budgets and seeing where some regular monthly payments could be consolidated.
“The big factor to remember is that in many cases, as the pandemic restrictions ease and the economy picks up, income levels are going to improve quickly and customers do not want to be saddled with a long-term remortgage scenario, when a more targeted second charge loan can deal with the specific issue, is more flexible and has no upfront fees, such as valuation and legal costs.”
Crewe added: “Brokers might not feel comfortable with customers seeking help of this sort, but that is what specialists like Smart Money can help, enabling them to either refer those clients to us for recommendation or to work with us to be confident of making the right call on their behalf.”