Kurt Gowdy said:...or what?Quote:
The loan has to be satisfied in five months or less.
It's defaulted. All previous money and their vehicle is forfeited.
Starting a title loan company
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Last: 6 yr ago by LOYAL AG
It's defaulted. All previous money and their vehicle is forfeited.
So on the $1k example, let's say they make 5 interest payments and don't have the money to pay the principal on the last month. You've collected $1,050 and now have the vehicle.
A lot of the industry data shows a much different client base than many of you think. There are poor people, but there are a lot of realtors, small business owners, etc. who need quick liquidity. We've done a lot of research and some of the stats would shock many here.
Blahhead said:
A lot of the industry data shows a much different client base than many of you think. There are poor people, but there are a lot of realtors, small business owners, etc. who need quick liquidity. We've done a lot of research and some of the stats would shock many here.
I really do wish you and your business partners well, despite my own feelings about these types of businesses.
That said, it would kind of shock me if that was the primary market since I would expect most of these folks to have access to credit cards at lower or similar interest rates than that and to have access to unsecured loans from their banks at lower interest rates with higher limits than what their car is likely to provide. At a minimum, these people must have credit issues, because while I understand the need for liquidity, there are cheaper ways to get access to money than the stated rates here.
That said, you guys have done the research, I haven't. Good luck to you!
You guys talk about payday and title loans like only poor people use them. There is a reason there are payday loan stores in the suburbs now.
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
Title loans mean you will not have as hard a time collecting as on payday loans. I wish the OP all the success in the world.
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
Title loans mean you will not have as hard a time collecting as on payday loans. I wish the OP all the success in the world.
Quote:
A lot of the industry data shows a much different client base than many of you think. There are poor people, but there are a lot of realtors, small business owners, etc. who need quick liquidity. We've done a lot of research and some of the stats would shock many here.
Post them here if you don't mind then.
I certainly still don't see payday loan centers next to every grocery store in the suburbs, and their advertisements still run along side the late night lawyer/ITT/etc...ie the stuff that aimed that people who can't/don't work and need money.
Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
JDCAG (NOT Colin) said:Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
You suggesting credit card cash advances are an advantage to title loans, I already know you have no clue how this works and probably have never practically thought about what being cash poor really looks like and some of the problems incurred when somebody is cash poor.
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
I used a payday loan place after getting my first law job. I need suits, but didn't have any cash. I borrowed $500 and went back into pay after my first paycheck. They wouldn't take my money - they said I couldn't pay until after a certain date. If I recall correctly, they charged me around $200 for that $500.
You can't be serious.
Quote:
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
Yeah, that's the point...they are typically on the poorer end of the spectrum.
But again, the question is whether serving this market, which like the Russians, only makes it harder for people to make ends meet is really something ethical people should do.
ATM9000 said:JDCAG (NOT Colin) said:Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
You suggesting credit card cash advances are an advantage to title loans, I already know you have no clue how this works and probably have never practically thought about what being cash poor really looks like and some of the problems incurred when somebody is cash poor.
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
Who said anything about cash advances? You said people can't pay $200 to get their car fixed. When did garages start forcing folks to pay in cash? Sure, some people don't have access to credit, but I'm highly skeptical that these folks are going to climb out of their situation due to the help from title loan companies.
This is all in response to the notion that the clientel is mostly working professionals (realtors & small business owners were cited) and my question is how often do these folks not have $200 of available credit? And if they don't, then let's not try and paint the market as mostly professionals in quick need of cash.
I've heard those GPS units are pretty easy to remove. Same guys that unlock your stolen cell phone and sell pre-paid phone cards to Lat Am.
JDCAG (NOT Colin) said:ATM9000 said:JDCAG (NOT Colin) said:Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
You suggesting credit card cash advances are an advantage to title loans, I already know you have no clue how this works and probably have never practically thought about what being cash poor really looks like and some of the problems incurred when somebody is cash poor.
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
Who said anything about cash advances? You said people can't pay $200 to get their car fixed. When did garages start forcing folks to pay in cash? Sure, some people don't have access to credit, but I'm highly skeptical that these folks are going to climb out of their situation due to the help from title loan companies.
This is all in response to the notion that the clientel is mostly working professionals (realtors & small business owners were cited) and my question is how often do these folks not have $200 of available credit? And if they don't, then let's not try and paint the market as mostly professionals in quick need of cash.
The hell are you talking about me saying anything about somebody needing their car fixed?
There are plenty of situations and businesses that don't take credit card or folks out there that just can't get access to credit cards. Think things like child care or rent... Most of those types of businesses don't take credit cards.
Cash still really matters in this world... Especially amongst a class of people that none of us can ever relate to. You assume that because you have access to and can just throw expenses on a credit card that everyone can. That's just not the case.
You are right... A payday loan or cash advance on its own is probably not pulling somebody out of a bad situation... But for many, it is providing the means to keep them from moving from a bad situation to a worse one. Reading your responses though, it is clear you don't really understand the plight of being super poor in America.
ATM9000 said:JDCAG (NOT Colin) said:ATM9000 said:JDCAG (NOT Colin) said:Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
You suggesting credit card cash advances are an advantage to title loans, I already know you have no clue how this works and probably have never practically thought about what being cash poor really looks like and some of the problems incurred when somebody is cash poor.
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
Who said anything about cash advances? You said people can't pay $200 to get their car fixed. When did garages start forcing folks to pay in cash? Sure, some people don't have access to credit, but I'm highly skeptical that these folks are going to climb out of their situation due to the help from title loan companies.
This is all in response to the notion that the clientel is mostly working professionals (realtors & small business owners were cited) and my question is how often do these folks not have $200 of available credit? And if they don't, then let's not try and paint the market as mostly professionals in quick need of cash.
The hell are you talking about me saying anything about somebody needing their car fixed?
There are plenty of situations and businesses that don't take credit card or folks out there that just can't get access to credit cards. Think things like child care or rent... Most of those types of businesses don't take credit cards.
Cash still really matters in this world... Especially amongst a class of people that none of us can ever relate to. You assume that because you have access to and can just throw expenses on a credit card that everyone can. That's just not the case.
You are right... A payday loan or cash advance on its own is probably not pulling somebody out of a bad situation... But for many, it is providing the means to keep them from moving from a bad situation to a worse one. Reading your responses though, it is clear you don't really understand the plight of being super poor in America.
The original post I quoted that you went off on stated the question about the car needing repairs.
The other quote that started all of this was the op saying most clients were professional types and small business owners.
I addressed both of those cases and you are now moving the goal post back to poverty which I agree is the most likely circumstances if the user.
In those cases, however, I still contest that this business is more about getting their piece of the pie than about any sort of altruistic venture which was also proposed earlier (save the person from going to illegal means).
I get that you feel differently, and that is fine, but most of what you've done here is taking my quotes responding to specific hypotheticals and then raked me over the coals using other situations.
Sorry I struck a nerve.
JDCAG (NOT Colin) said:ATM9000 said:JDCAG (NOT Colin) said:ATM9000 said:JDCAG (NOT Colin) said:Bocephus said:
If you are living paycheck to paycheck (probably 80 percent of America) and your car breaks down, where is the average person gonna get $200 to fix it? You can't get a $200 loan from the bank. That's where these payday loan places provide a service.
I'd say a large portion of those people have access to credit cards with lower or equal interest rates.
You suggesting credit card cash advances are an advantage to title loans, I already know you have no clue how this works and probably have never practically thought about what being cash poor really looks like and some of the problems incurred when somebody is cash poor.
I am not going to say that everyone uses title and payday loans for the right reasons or that there isn't an over saturation of them in the market... but they do provide a real and necessary service for a segment of the population that I almost guarantee nobody posting in this thread has been close to ever in their lifetimes.
Who said anything about cash advances? You said people can't pay $200 to get their car fixed. When did garages start forcing folks to pay in cash? Sure, some people don't have access to credit, but I'm highly skeptical that these folks are going to climb out of their situation due to the help from title loan companies.
This is all in response to the notion that the clientel is mostly working professionals (realtors & small business owners were cited) and my question is how often do these folks not have $200 of available credit? And if they don't, then let's not try and paint the market as mostly professionals in quick need of cash.
The hell are you talking about me saying anything about somebody needing their car fixed?
There are plenty of situations and businesses that don't take credit card or folks out there that just can't get access to credit cards. Think things like child care or rent... Most of those types of businesses don't take credit cards.
Cash still really matters in this world... Especially amongst a class of people that none of us can ever relate to. You assume that because you have access to and can just throw expenses on a credit card that everyone can. That's just not the case.
You are right... A payday loan or cash advance on its own is probably not pulling somebody out of a bad situation... But for many, it is providing the means to keep them from moving from a bad situation to a worse one. Reading your responses though, it is clear you don't really understand the plight of being super poor in America.
The original post I quoted that you went off on stated the question about the car needing repairs.
The other quote that started all of this was the op saying most clients were professional types and small business owners.
I addressed both of those cases and you are now moving the goal post back to poverty which I agree is the most likely circumstances if the user.
In those cases, however, I still contest that this business is more about getting their piece of the pie than about any sort of altruistic venture which was also proposed earlier (save the person from going to illegal means).
I get that you feel differently, and that is fine, but most of what you've done here is taking my quotes responding to specific hypotheticals and then raked me over the coals using other situations.
Sorry I struck a nerve.
Quote me where I said the word "most." "A lot of" doesn't mean most.
Also, a business isn't about charity. It's about making money by filling a void in the market. If we can offer better terms, on a needed service, we'll do it. I am glad the client gets a better deal, but I am really only worried with the bottom line.
One thing to know about selling money is that it takes a bunch to prime the pump. You can do it on $100k but you'll be scraping the bucket on many things that you don't want to scrape the bucket on. For one you don't want to get out of the starting line by low balling. You want to start as the guy who is crazy and is loaning too much money! The word gets out quick and you'll want it to.
Your #1 asset will be your employees and yourself. Your clientele will be down on life as it is and they don't want to come into your store and deal with an *******. They want someone who can relate, who won't judge and is ready to help. Find someone who can people flirt, is trustworthy and let them work. If they do well pay them well with a solid bonus and commission program. They're hard to come by and they're everything. A few months with the wrong manager and it will take years to get your reputation back.
Your main clientele will be middle class workers who are terrible with their money. They don't keep it whether they make it hands over fist or they've lost their job. This is why this business is mostly recession proof. These people like to deal with people who they can relate with and are comfortable with. Their main mission is getting enough money, not the cheapest, not the fastest but the most!
You'll deal a lot with Mexicans. Not really because they're bad with money but because they use Pawnshops and Title Loans as their bank. They deal in cash and will come in and out of your store with the same collateral all year long.
Cash flow will be tight from the end of May to the beginning of October and then again right before Christamas. Money will flow like you'll never believe after the income tax refund season begins in late February. Everyone will pay off their loans and others will buy your inventory. Your loan balance will collapse but don't worry, it will all come back again at the end of May and the process starts over.
You'll be regulated by the OCCC and they don't play well with others. I'm not sure about the barrier to business that the Title Loan industry faces but in the Pawnshop world it's a nightmare in Texas. You'll need a net asset requirement to open a pawnshop and that starts at $250k for a new license. I'm not sure if its the same for title loan companies, but I imagine they'll have something in place to A. weed out the individuals who wouldn't mind weaseling out of a bad situation and 2.) so they can weed out new business altogether.
Finally if you run it right you can make money. Run it wrong and you'll lose money and possibly go to jail. If you live by these two rules you'll be fine. 1.) Be as friendly as you can and 2.) loan out as much money as you can. Good luck.
Your #1 asset will be your employees and yourself. Your clientele will be down on life as it is and they don't want to come into your store and deal with an *******. They want someone who can relate, who won't judge and is ready to help. Find someone who can people flirt, is trustworthy and let them work. If they do well pay them well with a solid bonus and commission program. They're hard to come by and they're everything. A few months with the wrong manager and it will take years to get your reputation back.
Your main clientele will be middle class workers who are terrible with their money. They don't keep it whether they make it hands over fist or they've lost their job. This is why this business is mostly recession proof. These people like to deal with people who they can relate with and are comfortable with. Their main mission is getting enough money, not the cheapest, not the fastest but the most!
You'll deal a lot with Mexicans. Not really because they're bad with money but because they use Pawnshops and Title Loans as their bank. They deal in cash and will come in and out of your store with the same collateral all year long.
Cash flow will be tight from the end of May to the beginning of October and then again right before Christamas. Money will flow like you'll never believe after the income tax refund season begins in late February. Everyone will pay off their loans and others will buy your inventory. Your loan balance will collapse but don't worry, it will all come back again at the end of May and the process starts over.
You'll be regulated by the OCCC and they don't play well with others. I'm not sure about the barrier to business that the Title Loan industry faces but in the Pawnshop world it's a nightmare in Texas. You'll need a net asset requirement to open a pawnshop and that starts at $250k for a new license. I'm not sure if its the same for title loan companies, but I imagine they'll have something in place to A. weed out the individuals who wouldn't mind weaseling out of a bad situation and 2.) so they can weed out new business altogether.
Finally if you run it right you can make money. Run it wrong and you'll lose money and possibly go to jail. If you live by these two rules you'll be fine. 1.) Be as friendly as you can and 2.) loan out as much money as you can. Good luck.
03ki11erAG said:
One thing to know about selling money is that it takes a bunch to prime the pump. You can do it on $100k but you'll be scraping the bucket on many things that you don't want to scrape the bucket on. For one you don't want to get out of the starting line by low balling. You want to start as the guy who is crazy and is loaning too much money! The word gets out quick and you'll want it to.
Your #1 asset will be your employees and yourself. Your clientele will be down on life as it is and they don't want to come into your store and deal with an *******. They want someone who can relate, who won't judge and is ready to help. Find someone who can people flirt, is trustworthy and let them work. If they do well pay them well with a solid bonus and commission program. They're hard to come by and they're everything. A few months with the wrong manager and it will take years to get your reputation back.
Your main clientele will be middle class workers who are terrible with their money. They don't keep it whether they make it hands over fist or they've lost their job. This is why this business is mostly recession proof. These people like to deal with people who they can relate with and are comfortable with. Their main mission is getting enough money, not the cheapest, not the fastest but the most!
You'll deal a lot with Mexicans. Not really because they're bad with money but because they use Pawnshops and Title Loans as their bank. They deal in cash and will come in and out of your store with the same collateral all year long.
Cash flow will be tight from the end of May to the beginning of October and then again right before Christamas. Money will flow like you'll never believe after the income tax refund season begins in late February. Everyone will pay off their loans and others will buy your inventory. Your loan balance will collapse but don't worry, it will all come back again at the end of May and the process starts over.
You'll be regulated by the OCCC and they don't play well with others. I'm not sure about the barrier to business that the Title Loan industry faces but in the Pawnshop world it's a nightmare in Texas. You'll need a net asset requirement to open a pawnshop and that starts at $250k for a new license. I'm not sure if its the same for title loan companies, but I imagine they'll have something in place to A. weed out the individuals who wouldn't mind weaseling out of a bad situation and 2.) so they can weed out new business altogether.
Finally if you run it right you can make money. Run it wrong and you'll lose money and possibly go to jail. If you live by these two rules you'll be fine. 1.) Be as friendly as you can and 2.) loan out as much money as you can. Good luck.
Awesome advice. I really do appreciate you taking the time to lay all of that out there.
I'm going to ignore the ridiculous idea that a person is entitled to an interest free loan regardless of their financial situation. Instead we can focus on how exactly you propose we prevent these loans from being made? The DEA would love some advice on how to keep people from doing dumb things.Martin Q. Blank said:Emergency loans should be given to the poor interest free. High interest loans for someone's rims and 50" TV should not be given at all.aggietony2010 said:FIFYOgre09 said:
Those places and the people who operate them provide a sorely needed source of emergency liquidity to the impoverished and unbanked
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