Does applying for an extension help or hinder the customer?
When applying for an extension to an account, the company agrees to take a payment or payments and put them to the back of the loan. Therefore, the customer is not getting rid of the payment/payments, but they agree to pay it later. While this may benefit the customer now, it will result in a larger balance towards the end of the loan
Things to remember before offering an extension:
- The payments do not disappear when an extension is applied. The payment goes to the back of the loan.
- It could take longer for the customer to pay off the total balance.
- The customer may not be eligible for another extension when they really need it.