This summer, Money magazine reported that “Graduates in the Class of 2016 are saddled with $37,172 in student loan debt, on average, while those in the Class of 2003 had an average of $18,271 to pay back upon graduation.”
Considering this, it’s safe to say there’s a need for student loan modification. With student loan debt increasing every year, more and more students are starting their professional life with an overwhelming burden. Many students want to pay their loans off as quickly as possible. Other students need their monthly payments to be decreased because they are unemployed or only working part-time.
A loan modification merchant is responsible for helping students do just that. However, if you work in this industry yourself, you know loan modification merchants have their work cut out for them. These merchants are deemed as high-risk ventures. Due to strict underwriting rules, they are typically rejected by credit card processors. The good news: you can receive a merchant account for your student loan modification firm.
Industry Risk Analysis
The truth is, the loan modification industry is simply not the most stable. Revenue is low, and so is the number of merchants and firms offering loan modification services. The fact that it is also categorized as high-risk makes things even more complicated. Clients typically come in with unrealistic expectations and do not always receive the best deals, even with the genuine efforts of the merchant. Thus, there are many chargebacks – a huge reason why credit card processors shy away. Dishonesty of some student loan modification merchants also elevates the risks involved.
Specialized Credit Card Processing Services
As a high-risk business, loan modification merchants have to secure specialized credit card processing services to operate. In order to choose the right option, there are several features you should look for from a merchant account provider. Most importantly, the application process should be simple. You preferably want to complete the application online as well, since it is more secure.
In addition to a hassle-free application process, make sure you’ll receive ACH check processing services. You want to provide as many options as possible for your customers to send payments. In addition to safe credit card processing, the provider must be able to handle high volume processing. With cyberattacks on the rise, it’s also critical that you inquire after the provider’s chargeback protection and prevention programs. Make sure that their services allow you to be notified immediately and be proactive in the process.
Choosing the Right Option
Unfortunately, the high-risk nature of the industry does not leave student loan merchants many options. To make sure you’ll receiving the best services, do your research and weigh all your options. The ideal provider will offer all the features you’re looking for, at affordable rates and with reliable support services. Consider our student loan prep merchant account services here at eMerchantBroker.com. Ideally, the service provider should have years of experience in dealing with your industry, like the team of experts here at EMB.