what is in house financing 
the term in house financing refers to financing that is provided directly to consumers by retailers or other firms it allows people to purchase and finance goods and services directly from the seller in house financing eliminates the firm s reliance on third party lenders in the financial sector for providing the customer with funds to complete a transaction it is commonly used in the automotive industry and for large purchases in the retail sector understanding in house financingwhile some people are able to most don t have enough money to pay for large purchases outright in cash that s where financing comes into play this is a process that involves borrowing money from another party to complete the purchase in most cases this involves a bank or other lender in other instances the seller may offer financing itself this is referred to as in house financing in house financing is provided by many automobile makers and retailers to facilitate the purchasing process for customers the customer financing arm of the business is known as an investment center this type of lending benefits consumers in that they are typically able to obtain a loan through the company where they may not have been able to through traditional financing means such as via a bank in order to offer this kind of service retailers must have an established lending business within their firm or partner with a single third party credit provider to service a loan for their customers as noted above it is common in certain parts of the retail sector such as large department stores and within the automotive industry some auto dealers may add extra fees for in house financing always read the fine print special considerationswith the emergence of new financial technology fintech companies many borrowers now have greater in house financing options through faster and more convenient point of sale pos credit platforms point of sale credit technology can be built around a company s in house credit department or generally facilitated when a company partners with a single credit provider to service its customer s lending needs point of sale financing simplifies the lending process for customers by allowing them to apply for credit when they are ready to buy the better the credit score the more likely that the customer will be approved and often for higher credit limits it makes credit convenient for customers since they can receive a credit decision from the retailer in minutes it also makes it easier for retailers to close a deal credit backed sales are increasingly popular among consumers with more merchants taking on this option this was especially true during the covid 19 pandemic in fact fintech firms captured as much as 8 billion to 10 billion in revenue from traditional lenders it s estimated that 13 to 15 of purchases will use credit backed pos technology by 2023 1store credit cards tend to have higher interest rates but the rewards may be worthwhile for very frequent shoppers types of in house financingthe automobile sales industry is a prominent user of in house financing since its business relies on buyers taking auto loans to close the purchase of a vehicle offering a car buyer in house financing helps a firm to complete more deals by accepting more customers car dealers also have the benefit of setting their own standards for underwriting which sometimes encompasses a greater number of borrowers by accepting those with a lower credit score in many cases these lending platforms will accept borrowers that banks or other financial intermediaries might turn down for a loan other industries offering in house financing may include equipment manufacturers appliance stores or e commerce retail stores some medical and dental expenses may not be covered by insurance companies because of the types of procedures involved these are usually elective procedures such as plastic surgery and cosmetic dentistry if the consumer isn t able to pay for them upfront the provider may offer in house financing like auto dealers these service providers are able to set up their own financing terms for their clients who may be more likely to return for other services if they need them in the future in house financing is also very common for large retailers especially big box stores that offer more expensive products such as appliances furniture major electronics and building supplies financing options may come in the form of in store credit cards that can only be used at that retailer or loans some of the biggest names in retail that offer this type of financing include home depot lowe s apple and ashley furniture homestore providing the option to finance purchases in house helps retailers retain customer loyalty example of in house financingas noted above in house financing is a common option for consumers who wish to purchase a vehicle ford credit is one of the most well known in house auto financing groups in january 2017 ford credit partnered with autofi to make car buying and financing even easier through technology that allows the buyer to shop online for their car and auto loan 2ford customers can shop online through ford dealer websites with this new point of sale platform it allows them to buy and finance their cars this type of customer experience allows car buyers to spend less time at the dealership while also offering a faster sales process for ford 