THE BLOG

02
Mar

High Salaries, Low Savings: The Shocking Truth About Americans’ Paycheck-to-Paycheck Living.

A Lending Club Study reveals:

  • 28%: Share of consumers earning more than $200,000 who live paycheck to paycheck
  • 59%: Share of paycheck-to-paycheck consumers with issues paying their monthly bills that noted significant rises in prices for utilities in the past 12 months
  • 48%: Share of consumers living paycheck to paycheck with issues paying bills who pay for health insurance

“Being a money lender is like being a genie, except instead of three wishes, I give people the power to buy things they don’t need with money they don’t have.” TheBusinessOflending.com

45% of individuals earning more than $100,000 per year lived paycheck to paycheck.

56% of USA consumers don’t have access to $400 when faced with a sudden emergency!

Demand for credit continues unabated! [Other than housing because potential home sellers don’t want to give up their <3% mortgage interest rates!]

“As a money lender, I get to say the two words every person wants to hear: ‘approved’ and ‘money’ (and maybe ‘free pizza’).” PaydayLoanUniversity.com

The Study also highlights that individuals in the lower range of the upper-income bracket are particularly at risk of facing paycheck-to-paycheck living. A staggering 54% of consumers earning between $100,000 and $150,000 annually, more than double the median personal income in the U.S., are living paycheck to paycheck. This figure represents a 7 percentage-point increase from July 2022.

The Study’s results indicate that many Americans struggle to make ends meet despite high salaries. Several factors, such as rising inflation, increasing living costs, mounting debt, and a lack of financial planning, contribute to this.

The post-COVID-19 pandemic era has significantly impacted people’s finances, causing them to shift their spending and savings habits. Many consumers strongly desire to break free from the feeling of being confined during the pandemic, both physically and financially.

The Bottom Line?

Access to small-dollar loans is crucial for millions of households across the country.

For many families, unexpected expenses or emergencies can quickly derail their finances, leaving them with few options.

Traditional banks and lending institutions often require lengthy application processes, high credit scores, and collateral, making it difficult or even impossible for those needing the money they require.

On the other hand, small-dollar loans offer a viable alternative for those struggling to make ends meet.

With easy and accessible application processes, lower credit score requirements, and more flexible repayment terms, small-dollar loans provide a lifeline for households needing financial assistance.

We can help millions of families manage unexpected expenses and navigate challenging times by providing access to small-dollar loans.

Here’s the link to the Lending Club Study: Click to Access

How to Start a Payday Loan Business

Here it is! Our newly updated 500+ page Manual. We thoroughly explain step-by-step how to start & operate a profitable consumer loan business. 

If you doubt our “Bottom Line,” here’s a link to a Study and commentary by Ballard Spahr about the impact of the passage of a 36% APR cap in Illinois: Click to Access

25
Feb

Loan Shark Larry Resume

Greetings, financial world! I’m the copywriting “shark” you’ve been waiting for. My writing is as sharp as my teeth and as sleek as my fins. I am the predator of financial copywriting, and I take no prisoners.

Name: Loan Shark Larry

Objective: To sink my teeth into a career as a financial copywriting shark.

Education:

  • A. in Bitingly Witty Writing from Shark University
  • Master’s in Money-Making Copy from the School of Hard Knocks

Experience:

  • 5+ years experience as a loan shark, writing persuasive copy that sinks its teeth into consumer wallets
  • Expertise in payday loans, car title loans, installment loans, and personal loans (I’ve been around the block a few times)
  • Proven track record of increasing conversions by using humor, creative storytelling, and a touch of fear (just enough to keep them coming back for more)

Skills:

  • A bite that’s worse than my bark
  • Ability to stay afloat in a sea of financial jargon
  • Strong knowledge of SEO and SEM (I know how to swim to the top of the search results)
  • Proficient in Microsoft Office (I’m not afraid to use Excel to crunch numbers)

Personal Interests:

  • Swimming with the sharks (literally and figuratively)
  • Telling fishy jokes (they’re always a-dolphin-able)
  • Chasing after the big bucks (I’m always angling for a raise)

References:

  • Available upon request (but be warned, I may have to “loan” them to you)

Disclaimer: This resume is intended for entertainment purposes only and any similarities to actual loan sharks is purely coincidental.

 

Email me. We can schedule a call & explore …

  1. Want to make a splash in the lending industry? Hire Loan Shark Larry and watch the competition flounder! My copywriting is as powerful as a tidal wave, and I’ll make sure your business is riding the crest of success. So what are you waiting for? Let’s dive in and make some waves!

05
Feb

Entrepreneurs: Little-Known, Insider Benefits of Starting a Consumer Loan Business

how to start a consumer loan business

There are several types of consumer loan products available for subprime borrowers, who typically have lower credit scores and may struggle to secure loans from traditional banks and financial institutions. Some of the most common types of consumer loan products for the subprime market include:

  1. Payday Loans: Payday loans are short-term, high-interest loans that are typically due on the borrower’s next payday. These loans are often used for emergency expenses and are available without a credit check.

  2. Car Title Loans: Car title loans are loans that use the borrower’s car as collateral. The lender holds onto the car’s title until the loan is paid in full. These loans typically have high interest rates and are designed for borrowers who need quick cash and have a car they can use as collateral.

  3. Installment Loans: Installment loans are loans that are repaid over a set period of time in fixed, regular payments. These loans are typically used for larger purchases, such as home repairs or medical bills, and are available with either secured or unsecured terms.

  4. Line-of-Credit Loans: Line-of-credit loans are loans that allow borrowers to access a set amount of money, up to a certain limit, whenever they need it. The borrower only pays interest on the amount they borrow, and the loan is typically repaid over time with interest.

  5. Rent-to-Own Loans: Rent-to-own loans are loans that allow borrowers to rent a product, such as furniture or electronics, for a set period of time, with the option to purchase the product at the end of the rental period. These loans are typically available to subprime borrowers who may not be able to secure other forms of credit.

Millions of consumers living paycheck to paycheck!

According to a recent survey, about 44% of U.S. households do not have $500 in savings to cover an unexpected expense or financial emergency.

This means that nearly half of American households are living paycheck to paycheck and are vulnerable to financial instability when a sudden unexpected expense occurs.

The lack of savings can make it difficult for households to cover emergencies like car repairs, medical bills, or job loss, leading many to turn to high-interest loans or credit card debt to make ends meet.

Starting a consumer loan business can be a lucrative opportunity for entrepreneurs, as it provides several benefits:

  1. High demand: There is a high demand for consumer loans, as people are often in need of short-term or long-term financial support. This high demand can lead to a steady stream of business and revenue.

  2. Flexibility: Consumer loan businesses can offer a variety of loan products and services, giving entrepreneurs the flexibility to choose which types of loans to offer based on their target market and business strategy.

  3. Scalability: A consumer loan business can be easily scaled as demand grows, allowing entrepreneurs to expand their operations and increase their revenue.

  4. Potential for high returns: Consumer loans often come with high-interest rates, which can result in high returns for the business owner.

  5. Unique selling proposition: By offering a wide range of loan products and services and by differentiating themselves from other lenders in the market, consumer loan businesses can establish a unique selling proposition that appeals to their target market.

  6. Opportunity to help others: Consumer loan businesses have the opportunity to make a positive impact on people’s lives by providing financial support and assistance when they need it most.

Starting a consumer loan business does come with some challenges, such as regulatory compliance and managing risks, but with careful planning and execution, combined with a collaboration with the Trihouse Consulting Team, the benefits can far outweigh the challenges.

Entrepreneurs Investors

05
Feb

Insider Difference Between Payday Loans & Installment Loans

Think of a payday loan like borrowing a little bit of money from a friend to buy a toy and then giving the friend all the money back the next time you get paid.

An installment loan is like borrowing a bigger amount of money from a bank to buy a bicycle and then paying the bank back a little bit each month until you’ve paid it all back.

A payday loan and an installment loan are both types of loans, but they differ from each other.

A payday loan is a short-term loan that you are supposed to pay back with your next paycheck. This means that you borrow a small amount of money and have to pay it back very quickly, usually within a few weeks.

On the other hand, an installment loan is a loan that you pay back in smaller pieces, or installments, over a longer period.

This means you can borrow more money and don’t have to pay it back all at once as you do with a payday loan. Instead, you make regular payments until the loan is paid off.

An installment loan and a payday loan both have their own benefits and drawbacks.

Benefits of an installment loan:

  • Borrow larger amounts of money: With an installment loan, you can borrow more money than with a payday loan.
  • Longer repayment period: An installment loan gives you more time to pay back the money you borrowed, usually several months to a few years. This makes the payments more manageable and less stressful.
  • Lower interest rates: Interest rates for installment loans are generally lower than for payday loans. This means you will end up paying less in the long run.
  • Better for credit score: Making regular, on-time payments on an installment loan can help improve your credit score.

Benefits of a payday loan:

  • Quick and easy: Payday loans are often quick and easy to get, making them a convenient option when you need money fast.
  • No credit check: Some payday lenders don’t check your credit score, which can be helpful if you have a low credit score.
  • No collateral: You don’t have to put up any collateral, like your car or house, to get a payday loan.

It’s important to consider your personal financial situation and the terms of the loan before choosing between a payday loan or an installment loan. In general, an installment loan may be a better choice if you need to borrow a larger amount of money and want more time to pay it back. However, if you need money quickly and have a stable source of income to repay the loan, a payday loan might be a good option.

For Entrepreneurs:

Would you like to learn more about the benefits of entering the consumer loan industry? As a lender? An investor? 

11
Jan

Why Audacious John Chose a Payday Loan vs. a Bank “Loan”

Once upon a time, a consumer named John found himself in a difficult situation.

He had written a check for $100 to pay for an unexpected expense but soon realized that the check would bounce because he didn’t have enough money in his account to cover it.

He knew that if the check bounced, he would have to pay a $35 Non-Sufficient Funds (NSF) fee, adding even more financial stress to an already difficult situation.

Feeling concerned, John started looking for a way to borrow the $100 he needed to cover the check.

He came across a payday loan company that offered him a $100 loan with an interest rate of 15% and a repayment period of 14 days.

John knew that the interest rate was high and that he would have to pay back $115 in 14 days.

However, after considering all his options, he realized that taking out the payday loan was the best decision. He thought it was wiser to pay $115 in two weeks than to pay a $35 fee in one day.

John applied for the loan and was approved in minutes. His loan proceeds were deposited into his bank account within minutes!

He used the loan to cover the check and avoided the NSF fee.

He knew that his income was stable enough to pay back the loan in 2 weeks, and he made sure to budget accordingly.

Two weeks later, John was able to pay back the loan on time, and he was relieved that he had avoided the $35 NSF fee.

He felt proud of himself for making the intelligent decision to borrow the money he needed and for being able to pay it back on time.

He learned the importance of considering all options and the potential consequences before making a decision and also the importance of budgeting.

He also made sure to have emergency funds for unexpected situations in the future to avoid having to take out a payday loan again.

Typical Bank Overdraft Example (NSF’s are really payday loans by banks and credit unions!)

Overdraft Example:

100 X 365/6 X(170/100-1) = APR

6083.33X.70 = 4,258.33% APR

Total cost to client = $175.00

 

If a bank customer overdrafts their account by $100 they can be charged an initial $35+ Overdraft Fee for the 1st day, and an Extended Overdraft fee of $35 on the 6th day. 

Typical Payday Loan Example:

John borrows $100 for 14 days

Payday loan lender advances $85.00

On payday, John pays the lender a $15.00 fee + the $85 loan principal.

 

 

100 X 365/14 X (115/100 – 1 = APR

2607.14 X .15 = 443.21% APR

Total cost to client = $117

10
Jan

A Story About Jake, the Debt Collector

Here’s a story about a debt collector named Jake:

Debt collector working at theBusinessOflending.com

Once upon a time, there was a debt collector named Jake. He had been working in the collections industry for many years. He had seen it all – from borrowers who genuinely wanted to pay their debts but were facing financial hardships to those who simply didn’t care and thought they could get away with not paying.

One day, Jake received a file for a borrower named Maria. She had taken out an installment loan to fix her car. Shortly afterward, Walmart cut back her hours, so she could not make her payments.

Jake had heard this story many times before and was prepared for the usual excuses and pleas for leniency. But when he called Maria to discuss her account, something unexpected happened.

Maria answered the phone, and Jake could hear the sound of a baby crying in the background. He asked if everything was okay, and Maria burst into tears. She explained that her husband had recently been laid off from his job, and they were struggling to make ends meet. They were about to lose their home and had no idea how they would feed their family.

Jake, the debt collector, was moved by Maria’s story and knew he had to do something to help. He took the time to listen to her and understand her situation. He then suggested that they work out a payment plan that would be manageable for her and even offered to call other creditors on her behalf to see if they could work out a plan.

Maria was extremely grateful and thanked Jake for his kindness. She could make her payments on time, and eventually, her husband found a new job. With Jake’s help, Maria could get back on her feet and start rebuilding her credit.

[Jake’s employer, a personal loan company, signed up with a new platform that reports their subprime consumer loan customers’ payments to 2 of the 3 major credit bureaus! Their verified loan payment information is submitted directly to Transunion and Equifax! PS: This helps Maria and her husband build their credit AND provides leverage for subprime Lenders!] Thus, thanks to Jake, the debt collector’s efforts, Maria and her husband are rebuilding their credit.

Jake’s colleagues were impressed with his ability to connect with the borrower and find a solution that worked for both parties. They could see that by treating borrowers with empathy and understanding, they were more likely to work with them and find a way to resolve their debts. From that day on, Jake’s peers followed in his footsteps, tried to connect with the borrowers, and helped them in any way they could for the betterment of their employer and the debtor.

The moral of the story? A good debt collector always tries to understand the borrower’s situation and find a solution that works for everyone. A little empathy goes a long way!

PPS: Are you a Lender to the subprime? Would you like an introduction to this new credit-building platform? Email me at TrihouseConsulting@gmail.com. Your subject? “Credit Builder.”

07
Jan

Fast Cash for Your Emergencies: Payday Loans

How to start a consumer loan business

10 Reasons Consumers Living Paycheck to Paycheck Need Access to small Dollar Loans

To cover unexpected expenses, such as car repairs or medical bills, that cannot wait until the next paycheck.

To avoid late fees or overdraft charges on bills that cannot be paid on time due to a lack of funds.

To prevent the need to borrow money from friends or family, which can strain relationships.

To avoid having to sell personal possessions or valuable items to raise money in a pinch.

To avoid having to choose between paying bills and buying necessities, such as food or medication.

To avoid having to use credit cards, which can result in high interest charges and long-term debt.

To avoid having to take on more work or longer hours, which can be physically and mentally taxing.

To avoid having to rely on high-interest alternative lending options, such as pawn shops or car title loans.

To avoid having to take on additional part-time or freelance work, which can be unpredictable and unstable.

To avoid having to dip into savings, which can be detrimental to long-term financial security.

Our Philosophy

26
Dec

Profits: 2023 Demand for Car Title, Installment & PDLs

How to start a car title loan business
A new CFPB study revealed, "Between our 2021 and 2022 surveys, use of payday loans, installment loans, and car title loans increased dramatically nationwide! Demand for car title loans, in particular, rose nearly 3%."

The financial stability of Black and Hispanic consumers, renters, and under-40s suffered dramatically between 2021 and 2022, said the CFPB. 

The anticipated recession and higher unemployment in 2023 do not bode well for this demographic! 

“Despite a tight labor market, pandemic-era relief programs, including expanded unemployment benefits and stimulus checks, and lower consumer spending, financial well-being has returned to where it was in 2019,” the CFPB report revealed.

Unemployment remains low in December 2022, but many consumers are not prepared financially for unemployment, despite building large cash buffers and paying down debts during the first years of the pandemic. If they lost their main source of income, 37 percent of households could not cover expenses for longer than one month by using all sources, including savings, selling assets, borrowing, or seeking help from friends or family; 51 percent of Black and Hispanic households could not cover their expenses for longer than a month.

During a downturn, unemployment often lasts more than one month, and unemployment benefits can take several weeks or more to be deposited, leaving many households financially vulnerable to an unemployment period.”

[As a result, we lenders are tightening up our underwriting considerably. This strategy is reflected in our “loan-to-value” [LTV] metrics, our “ability to repay” calculations, and multiple KPIs as discussed in our Manual focused on “Lending to the Masses.” Car title loans, installment loans, and payday loans.]

Advertiser of the Month

Credit card debt has increased since June 2021 after falling early during Covid for all income groups.

“Meanwhile, one in eight households experienced lost income from unemployment or reduced work hours. Even more common, 34 percent of households experienced a major unexpected expense from vehicle repair or replacement, 31 percent a significant unexpected medical expense, 30 percent a computer or mobile phone replacement or repair, and 27 percent major household repairs.”

Here’s a link to the complete Study: CFPB “Making Ends Meet.”

13
Dec

For Lenders: “What If” Scenarios Excel Powered

TYPICAL WHAT-IF SCENARIOS

You buy leads. Should you buy $2.00 leads? $10 leads? $50 leads? $100 leads? $185 leads? [The average CAC [Customer Acquisition Cost in our industry is $185.00]

What’s the impact on your loan portfolio if you convert 8% of $50 leads vs 3% of $10 leads?

What if you increased your “reacts” to 65% vs. 42%?

What if you could hire an offshore VA [Virtual Assistant] at $200/month and work to increase your organic leads to 20/day vs. your anticipated 5/day?

What would be the impact on your portfolio if you purchased 150 leads daily at $8 with a conversion rate of 4% vs. 100 leads daily at $50 each with a conversion rate of 18%?

What is the impact on your portfolio if you increased your average loan principal to $425 vs. $385? To $500? $800? Whatever?

What is the impact on your portfolio if you decreased your FPDs [1st time Payment defaults} from 30% to 12%?

What’s the impact on your P & L if you increase your employee average hourly rate from $12.50/hr to $15.25/hr

What if you bring your call center in-house?

What if you add online/storefront title loans to your product offering? Say an average $1200 loan principal with a term of 6 months at $20/$100 loan principal? At $25/$100 loan principal for 30-day terms?

What if you offered a 36% APR unsecured loan product? An 80% APR? A 120% APR?

What if you implemented a formal referral program and spiffed your employees $25/funded loan? Spiffed customers $50/title loan?

What if your ACH fees increased from $1.50/each to $1.75/each?

What is the impact on your portfolio and P & L if your LMS [Loan Mngt. Software] provider increases its monthly fee from $150/month to $200/month & $1.00 per transaction?

What if your ACH fees increased from $1.50/each to $1.75/each?

What is the impact on your portfolio and P & L if your LMS [Loan Mngt. Software] provider increases its monthly fee from $150/month to $200/month & $1.00 per transaction?

And on and on and on… Only your imagination limits your possibilities!

The purpose of what-if scenarios is not to predict the future, but to influence it.

Plug-in different scenarios into our “Financial Modeling Projections Tool.” Develop a plan to improve those projections and execute them.

Your financial projection estimates your business’s future revenue and expenses based on various inputs. Our financial modeling tool enables you to “play” with these inputs.

Invest Now! Only $50.00. Delivered to your Inbox. Visa, M/C, PayPal…

→ Limited time inflation relief pricing: Save $147.00

Limited Time Inflation Relief Pricing $147 Off ends in

:
:
: