TREND: Online Title Loan, Installment and Line of Credit Lending

More “Fintech” Lenders Enter the Online Lending Arena

Startups offering 100% online installment, car title and line-of-credit lending are receiving a LOT of attention these days. And NOT just by the CFPB.

VC’s, hedge funds, family offices and entrepreneurs are entering the alternative financial services space in droves.

Lending money using a car, motorcycle, RV or boat title as security has been around a long time. So has installment, payday and line-of-credit lending.

We’ve been making $2500+ loans in California since 1998. In the “good old days” we charged borrowers 15% – 30% PER MONTH on their unpaid loan principal.

Today – at least in Los Angeles – we get 6% – 8% per month. Still not a bad return! 96% per year… In Texas, payday, title and installment lenders charge 20% – 30% per month on the unpaid principal. Every State varies…

A $3000 California loan on a $6000 automobile yields $360/month to $480/month interest.

And, the borrower still owes us the $3000 loan principal.

So, when I hear about new “FinTech” lenders launching loan platforms offering borrowers title loans serviced 100% online, I’m not surprised.

Example? Finova Financial just secured $52.5 million in funding.

What does Finova Financial do? Cloud and mobile-based auto title loan lending. Basically, Finova Financial is marketing, funding and servicing auto title loans 100% via the Internet.

Who funded Finova Financial? 500 Startups, Refractor Capital, the founder of NerdWallet and a company based in the United Arab Emirates.

Is this really some unique, cutting edge loan platform offering title loans? Hell no!

As we’ve written about in our Title Loan Training Manual, there are already a number of online title lenders that enable borrowers to access, qualify for and receive funding for a title loan via the Internet. All done with no brick-n-mortar footprint!

Some of these business models offer title loans. Some offer installment loans. Others, like Finova Financial offer a hybrid title loan line-of-credit [LOC].

New players are entering the “alternative financial services” space every day; in spite of the noise coming out of the CFPB.

The potential profits and the HUGE demographic that these loan products appeal to is hard to turn your back on!

Money has been and will continue to be MADE!

Business Wire reports 70 million consumers pay $138 billion in fees annually for alternative financial products.

FOR SALE: Online Installment loan company in business since early 2015. State licensed.
$2.5 million out on loan
$400,000 per month in revenue
18% delinquency
3400 loans to date. Info? Jer@TrihouseConsulting.com

Finova claims they will focus on “social-impact, they will be providing up to 70% lower costs to consumers on Car Equity Line of Credit (C-LOC) with complete loan term transparency.” Finova Financial will not employ the typical 30-day loan principal due date forced on consumers by the majority of title loan lenders.


Title Loan Biz

Finova Financial also claims on their website, “By providing an online lending platform that offers fast, affordable loans based on the equity in your car. It aims to deliver an online option to 70 million underserved Americans as well as 24/7 access to capital.”

Finova Financial is certainly NOT the first to enter this industry offering online servicing. Nor will they be the last. What they have accomplised is a PR event. They’ve made some noise, raised some money and assembled a Team.

Nothing anyone reading these words cannot accomplish!

You don’t even need to build the lending platform yourself! There are several quality “off-the-shelf” lending platforms available that enable a new lender to launch in a matter of days. It’s the same situation for consumer underwriting. There are a multitude of consumer underwriting platforms that easily integate with these same cloud-based and mobile friendly loan platforms. [I know them all!]

This is only the beginning!!! Consumers need money every day; since the beginning of time. Sure, we as lenders must always evolve, adapt, adjust, pivot, transform… develop new products… but we will never go away! Our customers need us and there is serious money to be made. After all, it’s not as if you’re buying a restaurant franchise and watching your produce rot! Your inventory is M-O-N-E-Y.

Questions? Help? Want to purchase a $2.5M installment loan portfolio having 3400 loans on the books? Jer@TrihouseConsulting.com

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