Starting a payday loan business?
A car title loan company?
Prefer to call them installment loans or line-of-credit loans?
You’re a money lender! But are you a Loan Shark?
Or, you’re thinking about the business of lending.
Here’s a real world example of a title loan we made. All data is real except the customer’s name.
Customer Name: Jose Jones
Amount of Loan Principal: $1500.00
Collateral: 2005 Toyota Camry XLE Sedan with 121,000 miles. “Good Condition” KBB.com.
Our Fee: 12%/month
Jose has paid us a total of $3420 in fees. [$180/month for 19 months.]
How much does Jose owe us today? $1500.
Now remember, Jose’s credit card was maxed.
Jose had no friends or family to loan him the money. [Actually, I think he was too embarrassed to ask…]
No bank or credit union would loan him $1500 in under 30 minutes…
We funded his loan and let him continue to drive his car.
Jose COULD have added a little every month to pay down the loan principal. He has not.
Are we loan sharks?
Are we financial counselors?
Do we get money to loan from the FED’s at <3% like the banks?
Should we simply tell him enough! Thank you. Here is your title?
What about the other 21.7% of our customers we have to chase?
Should we continue to earn a good profit and give a portion to our local charity?
Do you think we should put Jose on a payment plan?
Our competition charges as much as 30%/month on the loan principal.
Do we just keep Jose on the hook? We all know eventually Jose’s Toyota will break down and then what?
As several of my readers pointed out:
- Banks do not give their customers a break!
- Credit Unions show no mercy
- Credit card companies destroy ALL who fail to live up to their agreement
- NSF Fees can crush a consumer. 1800%+ APR’s!!!!!!!!!
WHAT WOULD YOU DO? PLEASE TELL ME: Jer@PaydayLoanIndustryBlog.com
Our customers have jobs. Our customers… READ MORE BELOW
have bank accounts. Our customers have the ability to pay back their loan! Our customer is the Walmart customer; the blue-collar, white-collar employee making $18,000 to $64,000 a year!
And MOST IMPORTANTLY what we all need to understand is that this segment is GROWING!
There is a world-wide shift occurring in the advanced economies!
The total number of employees in the service sector and other lower paying jobs is expanding.
Higher skilled, higher paying jobs are going off-shore to developing countries where wages are lower. This shift is so pronounced there is even a name for this market segment; it’s ALICE (Asset Limited Income Constrained Employed).
These are our people! Embrace them!!
Loan Shark: Noun INFORMAL•DEROGATORY
A moneylender who charges extremely high rates of interest, typically under illegal conditions. Loan Shark: Urban Dictionary Definition
Jer Trihouse 702-208-6736 Cell
Knowledge Store: Tribe & State-by-State Licensing Models