Payday Loans

[Mike Gayner]

Does anyone have any experience with short term/payday loans? I'm thinking of starting a payday loans business and any help/advice/information would be helpful.

 

[QueBert]

Depends where you wanna start it, I live in the ghetto and there's probably 6 of them within walking distance from where I live. They make a shit ton of money, I have seen areas where they was one just about every other block. If you open one the poorer the area the better. I'm not sure how so many thrive in bad areas where there are so many of them, but the majority around me have been here for 5+ years and still seem to be going strong.

I used one once, the amount I had to pay back sucked, but I needed money and that was the only way I could have gotten it that day.

 

[Bignate603]

Those places are the modern equivalent of loan sharks. Quite a few states are pushing to more tightly regulate them because some of their ridiculous fees and interest rates.

 

[Andrew1990]

Got one for $1000 for 14 months, will be paying back $1500+ after interest. Of course I am paying off large chunks to save interest. I will probably be paying $1200 total with interest though.

Biggest rip off ever.

 

[nick1985]

Got one for $1000 for 14 months, will be paying back $1500+ after interest. Of course I am paying off large chunks to save interest. I will probably be paying $1200 total with interest though.

Biggest rip off ever.

Why did you do it?

 

[Andrew1990]

Why did you do it?

I needed a car for work. Only way since banks told me to GTFO. I guess it was worth it as it improves my credit a little bit.

 

[Double Trouble]

I don't think that's a particularly good business to get into right now. Governments everywhere are starting to take a hard look at those businesses and restricting them. You'd be investing a lot in the business, with the possibility of having the rug pulled out from under you.

Also, if you don't already have experience in that business, it's a tough one to be in. You'd better be a tough-and-nasty kind of guy. Most of the people who run those check cashing places, pawn shops and payday loans are rather unsavory themselves.

 

[Mike Gayner]

Depends where you wanna start it, I live in the ghetto and there's probably 6 of them within walking distance from where I live. They make a shit ton of money, I have seen areas where they was one just about every other block. If you open one the poorer the area the better. I'm not sure how so many thrive in bad areas where there are so many of them, but the majority around me have been here for 5+ years and still seem to be going strong.

We don't really have ghettos where I live, but still plenty of low wage workers. I know of just one place that does them in my area, and they're currently closed for renovations.

Got one for $1000 for 14 months, will be paying back $1500+ after interest. Of course I am paying off large chunks to save interest. I will probably be paying $1200 total with interest though.

Biggest rip off ever.

So you entered into a mutually acceptable agreement, presumably knowing all the factors, yet they're ripping you off? You don't sound like someone I would want to be involved in business with TBH.

 

[Cdubneeddeal]

I needed a car for work. Only way since banks told me to GTFO. I guess it was worth it as it improves my credit a little bit.

I don't think that's correct. Just because you do a loan through them doesn't mean it improves your credit. IIRC, they don't report the payments but I assume it varies?

 

[EagleKeeper]

Check with your local government entity on what they require for licensing.

I would expect that you have to have a background check and comply with certain regulations.
Location and hours would be a couple.

In the US most of those places have fairly strong security setup to protect the employees. Camera, alarms, Plexiglas partitions, locked access doors, etc

 

[Mike Gayner]

I'm going through the legislation now. Security is not a big deal - we don't have a lot of crime where I am, and like I said we're not talking about a ghetto. But there's still plenty of low wage workers who would be willing to pay a high rate for a payday advance. Smart local marketing would be the key IMO.

 

[guyver01]

like I said we're not talking about a ghetto.

So.. who exactly do you think gets a "payday" loan...

Upper class people who make 6 figures a year?

or low/middle class who can't even live paycheck to paycheck?

You may not open your business in a ghetto..

but the ghetto is what you will be doing business with.

 

[rcpratt]

So.. who exactly do you think gets a "payday" loan...

Upper class people who make 6 figures a year?

or low/middle class who can't even live paycheck to paycheck?

You may not open your business in a ghetto..

but the ghetto is what you will be doing business with.

He said they have plenty of lower-middle class, paycheck to paycheck type workers. I could see it working if there isn't much competition.

 

[EagleKeeper]

There are payday loans in Vegas sitting in the shadow of the major casinos.

When a store has large amounts of cash available, it can become a target.
And when the customer base is less than upstanding; it presents a safety concern.

Look at banks in the area - expect to duplicate their safety measures at least.
Your situation should be an order of magnitude stronger due to the customer base.

For marketing; a couple of billboards in the general area, handout flyers and ads in the local grocery store type newspapers.

You should have no problem keeping your eyes open for such advertising medium. Video will be costly and probably not effective - radio and print will allow you to effectively target the customer base. Print should be cheaper.

 

[Mike Gayner]

So.. who exactly do you think gets a "payday" loan...

Upper class people who make 6 figures a year?

or low/middle class who can't even live paycheck to paycheck?

You may not open your business in a ghetto..

but the ghetto is what you will be doing business with.

There is virtually no competition, but we have heaps of workers who live paycheck to paycheck. And no, my customers wouldn't be from the ghetto because we don't have a "ghetto" where I live. I'm thinking more of local mechanics/young tradespeople/welfare beneficiaries.

 

[Mike Gayner]

When a store has large amounts of cash available, it can become a target.
And when the customer base is less than upstanding; it presents a safety concern.

Look at banks in the area - expect to duplicate their safety measures at least.
Your situation should be an order of magnitude stronger due to the customer base.

I think maybe it's hard to understand for some people because we don't have the same culture of crime here as exists in the USA. For one thing, armed robberies are rare because no one has guns. Banks here have very little security and are rarely robbed - I've never seen a bank with a security guard here.

 

[EagleKeeper]

how difficult would it be for one to use a knife/tire iron as a weapon? Usually there would be only 1-2 employees.
Most places, they are female. Hop over the counter and put a knife at the throat. A second employee would usually freeze in fear or scared of getting the coworker hurt.

Plan ahead for being safe and remove the temptation.

 

[guyver01]

For one thing, armed robberies are rare because no one has guns.

I think you underestimate the amount of guns in your country:

http://www.police.govt.nz/resources/1997/review-of-firearms-control/

About 230,000 licensed firearms owners own and use New Zealand's estimated 1.1 million firearms.


and that's licenced and registered.

I doubt the criminals register their guns with the police.

 

[Mike Gayner]

I think you underestimate the amount of guns in your country:

http://www.police.govt.nz/resources/1997/review-of-firearms-control/

About 230,000 licensed firearms owners own and use New Zealand's estimated 1.1 million firearms.


and that's licenced and registered.

I doubt the criminals register their guns with the police.

Ugh not this again. The vast majority of guns in NZ are kept by farmers and hunters. We have insanely tough regulations about getting and keeping guns (including having a police officer check that they're securely locked with the bolt removed/ammo kept separately).

Gun violence in NZ is very rare.

 

[ShawnD1]

He said they have plenty of lower-middle class, paycheck to paycheck type workers. I could see it working if there isn't much competition.

Even paycheck to paycheck people use regular credit cards. The people who use payday loans are the people who literally cannot get credit cards. They're the kind of people who sell their stuff to buy drugs.

 

[TruePaige]

I think maybe it's hard to understand for some people because we don't have the same culture of crime here as exists in the USA. For one thing, armed robberies are rare because no one has guns. Banks here have very little security and are rarely robbed - I've never seen a bank with a security guard here.

Wow. You have some serious misconceptions about the USA.

Crappy Ghettos have security guards everywhere and armed robberies. That is not the whole US.

Also these things are popular in ghettos because only the most retarded of people get payday loans. The amounts the lenders lend are too small for real emergencies and you could do far, far better at that level even with a cash advance on a credit card which doesn't require time to get the money from either.

Way to try to take advantage of the poorest of your countrymen by the way, douchebag.

 

[Mike Gayner]

Way to try to take advantage of the poorest of your countrymen by the way, douchebag.

Eh, you say taking advantage of, I say helping out. I fail to see how an agreement reached by two consenting adults leads to one taking advantage of the other.

 

[guyver01]

Eh, you say taking advantage of, I say helping out. I fail to see how an agreement reached by two consenting adults leads to one taking advantage of the other.

because that's just the fact of what loansharking is.

Unless you're going to give them "low low interest rates" ... such as .. "borrow $1,000 .. pay me back $1,100... take 12 months to pay back" ...

Payday loans are a legalized form of LoanSharking.

"borrow $1,000 ... pay me back $1,500 in 30 days... or i take your car"

The only difference is PayDay loan places cant legally break your kneecap if you dont pay back. They just take your collateral.

 

[TruePaige]

Eh, you say taking advantage of, I say helping out. I fail to see how an agreement reached by two consenting adults leads to one taking advantage of the other.

As I said above:

Also these things are popular in ghettos because only the most retarded of people get payday loans. The amounts the lenders lend are too small for real emergencies and you could do far, far better at that level even with a cash advance on a credit card which doesn't require time to get the money from either.

These people are too ignorant to grasp it. While I am a believer in freedom, and believe that these institutions should not be restricted from opening, I still find them to be one of the most predatory industries in existence.

 

[TruePaige]

because that's just the fact of what loansharking is.

Unless you're going to give them "low low interest rates" ... such as .. "borrow $1,000 .. pay me back $1,100... take 12 months to pay back" ...

Payday loans are a legalized form of LoanSharking.

"borrow $1,000 ... pay me back $1,500 in 30 days... or i take your car"

The only difference is PayDay loan places cant legally break your kneecap if you dont pay back. They just take your collateral.

And then you've made somebody who already is:

1) Bad with money.
2) Poor.
3) Less than intelligent.

a massive liability by reducing their net worth and ability to function, and in many cases where car titles are the collateral, at higher risk for societally destructive behavior.