Category: payday loan software

  • Payday loans are regulated

    A major misconception of the payday loan industry is that it’s not regulated. Consumer groups want to undermine payday lenders, so they really don’t mention this to their readers.

    In Colorado, the regulatory body, refunded around $1.8M to borrowers.

    Basically, how it works is that if a lender makes an error, they reimburse the borrower. This is how it should work. Don’t get me wrong, I don’t like frivolous rules, but if someone deserved a rebate and did not get it, they should.

    This should be handled by your payday loan software. If it’s not, you should find a new system.

  • Payday Loan Franchise

    Recently, I had a customer that got into the payday loan business through a payday loan franchise. He opened a second store and decided that the franchise, outside of sounding like a good idea, really was not.

    First, a payday loan franchise should give you a brand advantage over other lenders. Unless you can get a recognizible brand (Advance America, Check n Go, Check Into Cash, The Cash Store, a few more), why would you buy a franchise?

    The payday loan industry is not like the fast food industry. Every loan, customer or location are not the same.

    So is it worth it to buy a payday loan franchise? I don’t think so.

    I can’t say no, without making a suggestion. So, what should you do if you want to get into the business? There is no black or white answer, but you want to work with people or organizations with a reputation.

    Personally, I think you would gain more “doing it”. What I mean by this is going to work at a payday loan operation. Now, you should not deceive them. Find a mid size operator outside of your demographic and make a deal with them. You may have to sign a non-compete within 10 miles of a list of locations (current locations).

    Work for free. Committ six months to working part or full time. The operator will save a few bucks and you will get the invaluable experience you need. There is no substitute for doing it. Besides, if you have good character, you may get an investor or make a friend in the process.

    From my experience, serving the payday loan industry, is that the best business people make the most money. This starts with management. So, before I would pay a payday loan consultant $20k, I would get a business and management consultant.

    My name is Nick Sparagis and I’m one of the owners at IntroXL.com. We offer payday loan software.

  • Credit Unions competing with payday lenders

    Credit Unions offering some type of payday loan alternative is nothing new. What I think is worth sharing are the comments left on this article titled N. Texas credit unions plan to compete with payday lenders.

    rgvcowboyfan wrote on 7/2/2009 4:21:43 PM:
    Credit unions do not lend you if you have had a tough financial time in the past even though you may be working on improving your finances. Pay day loan companies do not look at your credit score, only at your current ability to pay.

    valtwin wrote on 7/2/2009 1:14:11 PM:
    Two totally different clienteles. The CUs will only be in competition amongst themselves.

    We provide payday loan software for many lenders, and I find payday lenders are much more leniant with, not to mention forgiving, of their customers. This goes a long way. Payday lenders are open to re-lending to customers that have been a late payers are delinquent in the past. I don’t think credit unions or banks are like that.

    The point is that you can make a cheaper product, but is it necessarily better?