3 Key Approaches to Mitigate Risk in Power Sport Finance

1. 3 Key Approaches to Mitigate Risk in Power Sport Finance

2. The tradition of powersports financing has been more challenging than conventional traditional vehicle loans. The biggest challenge of powersports financeindustry lies in the fact that repossessing vehicles poses a major challenge to the credit agencies. The entire industry of powersport lending revolves around a comparatively higher rate of interest just because the lender is always at risk from accidents and injuries. • The powersport automobiles primarily consist of motorcycles, snowmobiles, ATVs and watercraft. These vehicles are very expensive to repair and replace. In spite of the challenges involved with the power sport industry, there are three important areas which are correlated and have a major role to play in the power sport finance industry. • Robust Documentation: It can be assumed that the lenders and dealers would face strict regulatory compliances with several disclosure requirements which are analogous to the auto industry. The rapid improvement in technology has played a major role in helping both lenders and agencies in streamlining the process by allowing powersport finances to be disbursed more frequently depending on the merit of the borrower. The software technologies storing digital version of documentations like origination software and disclosure documents, adverse action notices, payment pre-authorization and application denials help in making the powersport finance option more consensus based.

3. Dynamic Credit Scoring, debt to income calculations: Dynamic credit calculations are a mandate for the powersport finance industry. This assists the finance companies in doing proper asset checks along with a thorough credit assessment. Since the powersport arena is prone to several risks, there is a high chance that without a dynamic credit rating and assessment model, there would be an inaccurate assessment of the same from the end of credit agency. This might lead to discrepancies in the entire loan disbursement process. The risk assessment from the credit ratings is an art and the curve reflects a lot regarding the borrower in concern. This is an art of credit assessment which plays a vital role in risk mitigation in high risk finance industries like the powersport finance. Today, technology is playing a major role in managing risks in all segments of the financial industry. • Augmented fraud platform: This is one of the key areas of the loan and insurance sector. Frauds are quite rampant and a dynamic customer profiling and assessment is the best technique to mitigate frauds. Some of the most common fraud mitigation techniques adopted by the credit finance agencies across the world are

4. Linkage analysis: This is a technique to measure fraud behaviour like social network scams, phishing, identity thefts and other forms of data thefts which can be conducted by linking with other individuals. • Velocity check: This is a simple assessment which calculates and analyzes a customer’s recent activities to map an overall behaviour profile. Such profiling helps fintech companies from becoming victims of scams. • Fraud scoring tools and statistical assessment: The game of numbers is very powerful and plays a major role in minimizing fraud transactions, pulling out fake customers and identify the genuine customers who could have a potentially steady credit future. About Zip Loan: Zip Loan offers a smooth lending platform for customers by ensuring a smooth and hassle free auto repair, no credit needed financing. Thus, customers having a good credit background can always rely on Zip Loan for easy disbursals of powersport loans. With Zip Loan, getting credit is much easier than before.

5. Zip Loan https://www.zip-loan.com/ info@zip-loan.com 800-560-7024 3116 Weddington Rd #900, Matthews NC 28105