Smart Lending’s Melissa Gielnik shares her experience of the past eight years in specialist lending, and how it has helped her help everyday people
Q: How long have you been offering specialist lending?
About eight years.
Q: Why do you offer specialist lending instead of just sticking to standard loans?
I had clients that the standard banks and standard loans couldn’t actually service, and I couldn’t help them. I could see the benefit of refinancing or consolidating, but the mainstream lenders weren’t able to help them. That’s how we started with specialist lending.
Q: What are the advantages of dealing with clients who require a specialist solution?
There are lots of advantages. I think one of the big ones is that they are amazing advocates for your business. The clients that you help, that no one else can help, then go about recommending you to all their friends and family for their prime loans as well. It’s a really, really good relationship-building tool.
Q: What types of clients generally need a specialist solution and how do you identify them?
There are two types of clients who need specialist solutions.
One of them would be the severely credit-impaired client – the client who might have had a life tragedy that has affected their credit, and they need a consolidation.
The other type of client is the self-employed client who is in a growth period of their business and has large expectations of earning more than what they currently show on their tax returns.
Specialist lenders are more active in trying to lend to the type of clients who might not fit the parameters of a major bank.
Q: Is the need for a specialist loan a possibility for just about anyone?
We had one client who was declined by everyone, but they had no reason to have their credit score declined. They didn’t necessarily need a consolidation, but they were looking for a loan at 90 per cent.
We were able to place them with Pepper Home Loans at a rate equivalent to a major lender because the specialist lenders don’t credit score. There are lots of different niches that they do that are really beneficial to the everyday client. The major lenders have very defined boxes.
Q: Is a specialist loan only ever considered a short-term solution?
Not at all. The clients who I placed who were actually not credit impaired but had their credit score declined will possibly remain with a specialist lender for some time. They didn’t pay a mortgage insurance premium – they went into the loan on an equivalent rate to a major lender, so why would I move them?
We are in constant contact with our clients and we flag the clients where it is a short-term solution, and we revisit those in a 12- to 24-month period, but it’s not always a short-term solution.
Q: How will the specialist lending market play out over the next 12 months?
With banks’ lending practices and their credit scoring becoming tighter, there will definitely be more of a need for specialist lending.
Melissa Gielnik, Smart Lending, Melton, Vic
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