Borrower Requirements for Payday & Installment Loans
At a minimum:
- Military exemption
- Debit card
- Completed payday or installment loan application
- Proof of income (Normally a bank statement(s)
- Maximum of 2 bank account NSF’s in past 30 days
- Demonstrate an ability to repay the loan; meet the terms of the loan
Note: Again, these are the very minimums. Your loan business minimum requirements may differ. And many operators will disagree with my last point!
Where are you on your installment loan lending business evolutionary scale?
If you’re a startup, having a serious amount of capital you need to put to work quickly, you will have to embrace more risk and expect higher first-time default rates.
Your first time customer acquisition costs will be higher than a fully matured portfolio as well.
On the other hand, those of us with legacy portfolios having displayed stability beyond the first 2+ years, will likely treat our loan portfolio as an annuity. 80% plus of your customer base will be returning borrowers. 10% – 20% of your customers will have to be replaced annually.
There are a multitude of strategies to profiting in the business of lending money to make money; without the need to actually fund loans. Here are 14 different ways I discussed previously: “14 Ways to Make Money in the Payday Loan – Installment Loan Space.”
Finally, employ one or more of the sub-prime consumer agencies we thoroughly discuss in our Manuals a few of which are listed here: Payday, Car Title & Installment Loan Resources