Diary of a Loan Shark!
Definition of a Loan Shark: "One who lends money to individuals at exorbitant rates of interest." [Mirriam-Webster.]
Mirriam Webster adds that "an example of a shark is a tough lawyer who always wins his casses."
What is a money loan shark per WikiPedia? "Licensed payday loan and car title loan businesses lending money at high rates of interest on the security of a post dated check or a car, are often described as loan sharks by their critics due to high interest rates that trap debtors, stopping short of illiegal lending and violent collection practices."
- The following statistics represent our best estimates of the typical returns possible for one payday loan - personal loan -
installment loan location:
- Monthly Volume for 1 store: 575 loans
- Average Loan: $300
- Average Fee %: 15%
- Average Fee: $15.00 per $100.00 Advanced
- Total Monthly Loan Volume: $146,625.00 ($255 X 575)
- Total Monthly Fee Volume: $25,875 ($45 X 575)
Many payday loan operators charge an initial "set-up" fee of $5.00 to $10.00 the first time an applicant receives a paycheck advance. This could add significant additional profits to your operation. Check your state laws.
These metrics are based on our best opinion of our stores, interviews with members of management of existing stores, statistics gathered via attendance at industry conferences and conventions. YOUR RESULTS MAY BE DIFFERENT!
Are you attempting to determine the advisability of starting a new consumer loan business? Or perhaps you're an existing pawnshop, bail bond company or check cashing operator considering the addition of a paycheck/payday/installment profit center to your operation? What will your first year sales/earnings be? Guess? Certainly you can look at the demographics of your market area. Evaluate your competition; if any. Visit existing operations in other markets. Read any trade periodicals, if they exist. Get a job in the industry for a while. But bottom line, "IT DEPENDS!"
That is exactly our situation. We do not know what assets you bring to the equation. We all know hard work (luck) and timing can make all the difference in the world. Certainly the timing for a consumer loan, payday advance/deferred deposit/car title loan business has never been better. It is a product for which clients are clamoring. IT'S THE OLDEST PROFESSION! But what results you will achieve are beyond our control. See our Disclaimer Page
[NOTE: We do offer a 500+ page ""Bible" everyone in the business of lending to the masses calls, " How to Loan Money to the Masses Profitably" available HERE!]We have certainly heard of locations doing much bigger numbers; particularly in large, metropolitan cities. And of course, a small town will do less volume.
We think that, after the initial "build" period subsides and your location matures, a leveling off somewhere between 220 - 600 customers at approximately 225-700 payday loan transactions per month is typical.
Annual Percentage Rates Our research and experience indicates the average payday loan is for a period of 8 days (the next payday for your client). If you were to advance $100 to your client, and the fee in your area is 15%, and you planned to hold your client's check until their next payday in 8 days, you would yield the following APR:
$100/.85=$117.65 in fees with an annual return on YOUR MONEY of 805%!
How much is your investment? $237.00.
Trihouse Enterprises, Inc.
Payday, Installment and Car Title Loan Consulting
27068 La Paz Rd. Suite 113
Aliso Viejo, Calif. 92656
1-702-208-6736
TrihouseConsulting@gmail.com