Quick answer: Strong results come from three things.
1) A clear timeline with specific call attempts and letters.
2) Calm, compliant phone language that sets same-day payments or firm promises.
3) Meticulous notes in your LMS so nothing slips. Letters matter for notice, but recoveries are driven by effective phone contact plus accurate reporting where policy allows.
Entity and role
Brand: theBusinessOfLending
Author: theBusinessOfLending Editorial Team
What we do: eBooks, SOPs, and consulting for consumer and subprime lending operations
Updated: 2025-10-08. What changed: aligned language and day-by-day plan for payday lenders, added example scripts, reinforced recordkeeping requirements.
Opening story
Most losses start in the first 30 days when teams hesitate, forget to log promises, or rely only on letters.
High performers contact early, stay professional, and drive cures with tight follow-up and documentation.
The pain
Ad-hoc calling and weak notes lead to missed cures, compliance risk, and avoidable charge-offs.
The fix is one written workflow with required call language, letter cadence, and a notes template that every agent follows.
The bridge
Use the standardized plan below.
It blends required disclosures, a proven letter schedule, right-time phone contact, and rigorous recordkeeping inside your LMS.
The workflow blueprint
1) Compliance phrases for every call
Agents must open with the mini-Miranda. On the initial call they must also give the 30-day dispute and verification notice. Train this verbatim.
Suggested friendly opener after verification: “Hi [Name], this is [Agent] with [Company]. Your account is past due [amount]. I can set up a plan today. What can you do right now so we get this handled”
2) Day-by-day contact plan
Day 0–1: First late. Call, text, and email with the compliant opener. Log promises and schedule the next call.
By Day 10: Letter 1. Demand payment within 10 days. Continue phone contact. If returned item, follow your lawful ACH or bank collection workflow. Notify your subprime CRA per policy.
Day 10–15: Letter 2 warns the debtor their credit rating is at risk if not resolved within the reporting window. Increase call cadence.
Day 30: Report to a credit bureau if your policy allows. Send Final Letter noting potential legal and credit actions. Never refer consumer loan checks for criminal prosecution.
After Day 30: If no payment or valid dispute, watch for new credit activity and attempt right-time contact through verification partners.
Why this works: It is not the letters that collect. It is skilled phone contact plus accurate negative reporting where used.
3) Documentation rule
Every touch must be logged: agent, date, time, channel, result, commitment amount, and next call date. Your software should include a Collections Module or equivalent to enforce fields and templates. If you use a call center, their notes must land in your system.
4) Extended Payment Plans the right way
Offer EPPs when a borrower is willing but short this period. Document terms and follow-ups. EPPs save charge-offs and retain the customer relationship.
5) Tone and mindset
Collectors never threaten. They aim to collect something today or secure a dated promise for next payday. Train neutral, positive language.
6) Guardrails
Honor disputes and verify before legal action.
No harassment or jail threats. No employer disclosures. Follow local rules.
Consumer loan checks are not referred for criminal prosecution.
Quick-start checklist
Paste this plan into your SOP and LMS task queues.
Load Letter 1, Letter 2, Final Letter templates.
Script the initial call disclosures and friendly opener. QA weekly.
Turn on CRA reporting per policy and log disputes.
Define EPP eligibility and agent authority levels.
Proof box: what usually moves the needle
Day 0 call + Day 10 letter + Day 30 report pattern captures cures earlier and reduces roll.
Teams that log every promise and next call close more same-day partials.
Calm, professional agents outperform “tough talkers.”
Use cases
Storefront payday lender lifts first-30-day cures by combining the letter cadence with right-time calling.
Online payday lender relies on LMS tasks, SMS reminders, and EPPs to turn promises into pays.
Hybrid keeps early-stage in-house and outsources late-stage to a specialist with skip tracing and intelligent dialing. Consider batch placements after 45 days.
Compare your options
| Feature | In-house only | Outsourced late-stage | Hybrid |
|---|---|---|---|
| Speed to stand up | Fast | Medium | Medium |
| Control of tone | High | Medium | High early, medium late |
| Cost | Salaries + LMS | Fee or percent | Mixed |
| Tools | Your LMS, dialer | Agency dialer, legal | Both |
| Best use | Early-stage cures | Skip, legal, long tail | Scales with growth |
Outsourcers add skip and dialing stacks. Costs vary by volume and software. Evaluate contracts and reporting SLAs.
Next-step prompts for your SOP meeting
What are our Day 0, Day 10, Day 30 scripts and letters by product
Who can approve EPPs and for how long
Which note fields are mandatory in our Collections Module
Which CRAs do we report to and when
How do we process and track written disputes and verifications
- Refer to our eBook for a deep dive into Collections
Want more details & a structured Playbook?
Our eBook, “How to Loan Money to Strangers without Getting Your Butt Handed to You” thoroughly discusses subprime lending collection strategies, tactics and more. Immediate download to your Inbox.
Frequently asked questions
What must agents say at the start of the first call
Open with the mini-Miranda and include the 30-day dispute and verification notice on the initial call. Train this word-for-word.
Do letters still matter
Yes for documentation and notice, but recoveries usually come from skilled phone work plus proper reporting.
How detailed do our notes need to be
Every contact needs agent, date, time, channel, result, promise amount, and next call date. Use your LMS to enforce fields.
When should we offer an Extended Payment Plan
Offer EPPs when the borrower is willing but short this period. Document terms and follow-ups.
What can we never do
No jail threats or harassment. Do not disclose to employers. Do not refer consumer loan checks for criminal prosecution. Align with local rules.
Closing: Payday Loan Collections
- Collections is a system.
- Give your team compliant words, a daily plan, and a notes process that never forgets.
- Start small, measure cures, and keep improving.
Get the Bible eBook → https://trihouse.gumroad.com/l/LendingToTheMasses
Car Title Lending Expansion Playbook → https://trihouse.gumroad.com/l/TitleLoans
Local SEO Domination for Subprime Lenders → https://trihouse.gumroad.com/l/GBL
Hire our consulting team → https://thebusinessoflending.com/hire-payday-loan-consultant/