CONSUMERS on the hunt for loan specials to cover back-to-school expenses this year may have to explore other financing options as deals typically offered by financial institutions to cushion the impact on parents are slowly disappearing.

Before the strains of the COVID-19 pandemic started to weigh on the economy, deposit-taking institutions and microloan companies were jostling for a share of the back-to-school loan market, offering a mix of discounted interest rates, shorter payback periods, payment holidays, and promotional or incentive loans.

For example, back in 2019 Sagicor Bank rolled out its Make Back to School Easy promotion. At the time, the bank said it would allow applicants one payment holiday on approval of an unsecured loan from the bank. Other players would compete through promotional loans which, for example, offered select loan applicants back-to-school grants. The initiatives are designed to woo new customers and retain existing ones on an annual basis.

But fast-forward to August 2024 and only one deposit-taking institution — Scotiabank — has come to market with a promotional back-to-school loan offering.

The bank is offering random customers the chance to win hundreds of thousands of dollars towards back-to-school expenses. However, the offer is reserved for eligible Scotiabank credit card holders who spend a certain amount with specific merchant groups up to the end of September.

Other financial institutions, including Sagicor and JN Bank, aren’t leaving parents out in the cold regarding back-to-school expenses but they will have to apply for the needed funds under the usual category — personal, unsecured loans.

“JN Bank offers a personal unsecured loan for any purpose — including to cover back-to-school expenses — all year round,” JN Bank said in response to queries from the Jamaica Observer. It lends up to $5 million unsecured.

Meanwhile, National Commercial Bank (NCB) said it has a dedicated education loan package providing up to $2.5 million unsecured. However, the bank has largely been promoting the NCB Fast Cash Loan as the route for consumers to “get all the back-to-school must-haves”. Under this offering, qualified consumers can access up to $300,000 in minutes, with up to 36 months to repay, the bank said.

Credit unions are also looking to boost revenues this summer, but a review of the offerings does not indicate that there are added sweeteners to woo consumers.

First Heritage Credit Union has come to market with its Zest of Summer: Borrow or Save promotion, but it is purely marketed around facilitating loans for any purpose. The offerings are broken down into three categories: Cash in a Flash, under which applicants can apply for a loan up to $500,000; Easi Pay, which allows customers to access up to $3 million; and Easi Pay Max, under which applicants can access loans up to $5 million.

Over at COK Sodality Credit Union borrowers can access up to $2 million through an unsecured loan.

Microlenders lead in back-to-school promotional loans

While marketing campaigns and research by Sunday Finance indicate an overall scale down in back-to-school promotional loans, the data also show that microfinance companies are leading the pack in back-to-school loan sale offerings.

Access Financial is currently offering applicants funds for back-to-school shopping of up to $3 million at a reduced interest rate, with no guarantors required.

At Kris and Charles, some 24 loan applicants will each be awarded a $50,000 back-to-school grant when they apply for a new loan of a minimum $250,000. “This amount may include an existing balance being refinanced,” the microlender said regarding the promotion that runs up to August 30, 2024.

Additionally, BlueStart, which trades as Courts Ready Cash, is offering consumers a chance to “live bill-free for six months” when they take out a cash loan of $80,000 or more this summer.

“Don’t you wish things could be just a little more free? Take a loan of $80,000 or more to cover back=to-school expenses, vacation, road trips, or any other summer plans and be bill- and worry-free,” Courts Ready said.