Payday Loan and Car Title Strategies for Lower Default Rates

By | Oct 29, 2014

Should you reward your borrowers for making their payments on time? How could a reward program lower your default rates and build customer rapport? Many of us “beat-up” our borrowers in an effort to get them to pay us first. How many lenders employ a strategy of rewarding good borrowers who pay us on time?

There’s some interesting research available at Its entitled, “Lower Interest for Timeliness (LIFT) Pilot: Final Report”


“As part of the market test, the LIFT feature rewarded consumers who made three consecutive on-time payments with a 25-basis-point loan pricing reduction. Within the report, a team of researchers from the University of Wisconsin-Madison present detailed insights and results from this market pilot.”

“The researchers conclude that the LIFT pilot proves borrowers do respond to positive incentives for on-time payments. The report also highlights the impact LIFT had on late fees, late-payments, and defaults.” Here’s a link to access the report: It’s not inexpensive! However, I’ve already shared the conclusion with you. :-)

While you’re at it, consider starting a title loan business:

How to Start a Car Title loan Business

Learn how to become a lender.




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