Interest Rate Caps Make Loans Less Available to Subprime Borrowers

Illinois’ imposition of an all-in annual percentage rate (APR) cap of 36% on loans under $40,000 from nonbank and non-credit-union lenders resulted in fewer loans being available to subprime borrowers.

Nearly 80% of respondents in an online survey of small-dollar credit customers in Illinois conducted about nine months after the imposition of the Illinois rate cap answered that they would like the option to return to their previous lender.

How to start a consumer loan business

This is according to a study by Gregory Elliehausen, J. Brandon Bolen, and Thomas W. Miller Jr. that analyzed credit bureau data from Illinois and Missouri.

The study found that interest rate caps make loans less available to subprime borrowers, contrary to the belief that caps make loans cheaper for necessitous individuals.

The study found that the number of unsecured installment loans to subprime borrowers decreased by 44% in Illinois in the six months following the imposition of the 36% interest rate cap.

This resulted in subprime borrowers being unable to replace the loans they lost that were made by finance companies.

Banks and credit unions, which were exempt under the Illinois law, did not materially increase the number of loans they made to subprime borrowers in the same period.

Subprime borrowers reported being unable to borrow money and being unable to pay one or more bills since March 2021.

Nearly 80% of respondents in an online survey of small-dollar credit customers in Illinois conducted about nine months after the imposition of the Illinois rate cap answered that they would like the option to return to their previous lender.

More than 90% indicated that their previous loan had helped them manage their financial situation at the time of the loan.

The study found that binding interest rate caps create loan deserts for some loan amounts, where there is demand but no supply.

Small-dollar loans require a high interest to generate the revenue needed to cover the considerable fixed costs for originating, servicing, and collecting these loans.

The study suggests that lawmakers must fully understand and accept that their actions have consequences for consumers.

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Loan Management Fees Got You in a FUNK?

Should you stay or should you go?

Loan management software for lenders: payday loans, car title loans, installment loans, line-of-credit loans, subprime loans

Hey there Lender,

Hope you’re doing great and drowning in a sea of loan requests!

We want to chat with you about something that’s been blowing up our phones lately – those pesky Loan Management Software [LMS] vendors and their outrageous fees!

Seems like every Tom, Dick, and Harry are upping their prices, and it’s not just one, but several!

What gives, right?

We know that changing your operating software is no small feat. It’s like trying to teach your grandpa how to use Snapchat – not easy!

You gotta think about data transfers, retraining your staff, and making sure the new software can actually do what you need it to do. It’s a whole ordeal!

But hey, if you can save 20-40% on your current software fees and still get the job done, why not give it a shot?

We know that being in the business of lending money to the masses is tough.

You gotta have the best tools, be super sophisticated, and make smart decisions about where you put your money.

It’s like playing chess, but with real money and no cute horses.

We’ve got some friends in the LMS industry who are 100% focused on our line of work, and they’re dying to meet you.

They’ve got some seriously sweet deals that might just make your day. And if you fill out our minimalist form below, we’ll do the intro and get out of your hair!

You can make an informed choice to stay or jump ship, and we’ll even earn a few shekels for our trouble while you shift some SERIOUS bucks to your bottom line!

It’s a win-win, baby! What did the Big Red Man say? “What’ve you got to lose?”

So what do you say, Lender? Wanna save some dough and improve your ROI? Let’s do this thing!

To our futures and your bank account!

Jer, Miro, and the Team

[wufoo username="trihouse" formhash="m1cr3mzl0hg8tk0" autoresize="true" height="1066" header="show" ssl="true"]

The Debt Collector’s Secret Weapon: The Robotic Persona

Payday Loan Debt Collector at work

AI Powered Debt Collection

Once upon a time, there was a debt collector named John.

John had made a name for himself in the industry by offering loans to people with bad credit, but he secretly feared that he wasn’t cut out for the job.

Every time John tried to call a borrower to ask them to pay off their loan, his palms would start to sweat, and he would stumble over his words.

He was so consumed by imposter syndrome that he began to avoid his borrowers altogether, hoping they would simply pay their debts.

One day, John’s boss called him into his office to discuss the high number of non-performing loans on John’s books.

John felt a knot form in his stomach as he sat down across from his boss, fearing that he would be fired on the spot.

But to John’s surprise, his boss had a unique solution to his problem. He suggested that John pretend to be a robot when calling his borrowers to collect payment.

At first, John was skeptical.

But his boss explained that robots don’t have emotions, so they can’t experience imposter syndrome.

Plus, if John pretended to be a robot, he could use a monotone voice and avoid any awkward conversations with borrowers.

John decided to give it a try.

The next day, he donned a metallic jumpsuit and put on a robotic voice. He dialed the first borrower on his list and waited for the voicemail to kick in.

“Hello, this is Robo-Lender,” John intoned in his monotone voice. “You have an outstanding debt that needs to be paid immediately. Failure to comply will result in the activation of our debt collection protocols.”

To John’s surprise, the borrower actually called back. And when they did, John kept up the robotic act, even throwing in a few “beep boops” for good measure.

To his amazement, John found that pretending to be a robot actually made it easier to collect payments from borrowers.

He no longer felt the same anxiety when making collection calls, and his borrowers seemed to respond better to the robotic persona.

In fact, John became so good at his robotic act that his boss even suggested he start wearing a robot costume to work.

From that day forward, John became known as the “Robo-Lender” at his company.

And while he still struggled with imposter syndrome from time to time, John knew that as long as he had his robot costume and monotone voice, he could face any debtor with confidence.


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.”

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’).”

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

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


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.


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


  • 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)


  • 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)


  • 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!


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


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? 


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


A Story About Jake, the Debt Collector

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

Debt collector working at

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 Your subject? “Credit Builder.”

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