It seems that you can't cross the street these days without becoming a member of some kind of affinity club eager to lend you money. Statoil and Waterford Stanley are the latest companies to bring the community of their customers together by offering them a loan. Waterford Stanley has announced a "consumer financing deal" with Friends First known as the Easy-Pay system. People buying gas or oil-fired cookers through this scheme will be able to get a low-interest unsecured loan of up to £20,000 (€25,390) from Friends First to cover purchase, delivery, installation costs and anything else they want.
The idea is that you get the kitchen or some other big job done when the range is installed. Friends First is offering a special introductory rate of 9.9 per cent APR over one to 10 years on its flexible loan.
Mr Michael Laffan, joint managing director of Waterford Stanley, said the company was offering a complete package to its customers.
"We recognise that a Stanley is a pretty major investment for a household so we're making it more accessible. We want to ensure that the services that go around product - the purchase, delivery, installation and the financing - are in place in a way that is of maximum benefit to the customer."
This kind of financing is well established in car sales and is all about convenience. But the customer can easily arrange a loan with another financial institution on similar terms if they prefer.
Statoil Premium Club has been mailing members in recent weeks with a personal loan offer negotiated with GE Capital. Members can borrow up to £15,000 unsecured from GE Capital for "those extra special presents for your loved ones at Christmas, long awaited home improvements, a newer car" or whatever they wish. Customers who take out loans receive Statoil Premium Club Points which can be used to claim gifts. Interest rates vary according to the amount borrowed and the term but GE Capital is offering 11.75 per cent on £10,000 over three years and 13.75 per cent on £5,000 over three years.
This is the second mailing of the offer this year. The first mailing took place in May and June and was a success, according to GE Capital head of direct lending Mr Martin Biddle.
Mr Biddle said the reason GE Capital was interested in Premium Club members was that their affinity membership showed that they were financially astute. GE Capital did not throw money at people, he said. "An important part of our service is to work out what the applicant can afford to borrow," he said. The Statoil brochure has a four-point qualifying list covering earnings, age, employment status and credit history, which is intended as a guide for applicants. There is a clear trend developing of convergence in consumer and financial services and we can expect to see more of this. GE Capital is working with other companies with a view to rolling out more schemes of this kind next year.
