Rebirth 79: I opened a bank in the United States

"I have thought about it carefully. Student loans are certainly a lot of pressure, but the repayment date of that loan is after the students graduate. That is to say, during their schooling, they themselves have no debt burden. , and some consumption on campus."

"Yale is not Princeton. There is a powerful board of directors behind it who is continuously transfusing blood. I have a position on the board of directors. Taking advantage of my position, I have contacted many gentlemen of the professor committee. I probably know about Yale's financial situation. A few. Yale is an Ivy League school that relies heavily on alumni donations, and annual alumni donations can basically account for 30% of fiscal revenue!"

"We are very aware of the general environment of these years, so...under the circumstances of financial distress, and with the expansion of enrollment in the past few years, the overall quality of Yale is actually in a decline. For example, the granting of grants, there are only a few A small number of students from poor families can get it, and a large number of poor students can only fill their living expenses with the income of work-study positions; the same is true for scholarships, the single amount is reduced, and the total amount of grants is also reduced.”

"This kind of economic situation is undoubtedly unhealthy. It means that they have almost no ability to resist risks at all! For example, I work in a restaurant, and the restaurant pays me a lunch and pays me a monthly salary of $600. In fact, Yale This salary is not available for ordinary positions, which means that after deducting my breakfast and dinner, plus some daily necessities, toilet paper, shampoo and other daily necessities, I can save up to one year a month. Hundred, to two hundred dollars, this is only possible when I have almost zero social interaction."

"And in Yale's environment, how can there be zero social interaction?! In short, I found that there are a large number of Yale students who are in that kind of environment. If they have nothing to do and no disease, then their income is enough to meet their own food and clothing. But once they get a little sick, or need to attend a certain party, rent a dress, or prepare a gift for the birthday of the girl they like, it may make their life that is not rich even worse!"

Patting a big stone on the side of the road, Carter motioned for everyone to sit down.

"Under normal circumstances, when encountering this kind of thing, they will choose to borrow money from their friends and classmates, and then use the next month's salary to repay the loan. This will undoubtedly consume a lot of human affection, but they have nothing to do about it .Banks and other traditional financial service institutions will never include these poor students in their customer lists.”

"Because they have no credit card bills, no credit history, and themselves. How many students do you think will establish their own personal credit files in the bank and have rich credit records?"

"Combined with our current environment, the interest rate has been completely crazy in the past few years! The Fed's benchmark interest rate is crazy, the general deposit rate is crazy, and the loan interest rate is also crazy!"

"In order to achieve a balance of revenue and expenditure as much as possible and reduce the risk of bad debts. Most banks now would rather catch a customer with a high credit rating and large spending power, kneel down and beg him for a loan, and send an account manager to help him I have been following for several months. I am unwilling to take out even a little money and lend it to these people who really need money, but they don't need much money!"

...

"I seem to understand what you mean. For these customers with low credit ratings, in your eyes, their actual credit is actually higher than the ratings that the data tells us!"

Going down Carter's train of thought, Goodman has a taste.
People from Yale University, how do you say that, a skinny camel is bigger than a horse
Even if it's a worst-case scenario, they really won't be able to repay the loan right now.But for these people, the future income will not be too bad in the United States. If there is such a stain on the credit record of these exquisite white-collar workers, consider whether the fine is more important, or better credit?

It's almost a no brainer, sooner or later they will pay back!
And, they have an advantage over the average high-street customer with a low credit rating.Namely, clear message!

With their student status information in hand, they may even consider cooperating with the school. If there is a record of breach of contract, they will not be allowed to graduate and so on.
"That's right! Moreover, these people are more qualified and ethical than ordinary street gangsters. Under normal circumstances, they seldom break contracts!"

Reminiscent of a data report in the past, the general idea is that compared with those born in the 90s, the number of defaults of lenders born in the 00s and 70s is almost a cliff-like decline, and a conclusion is drawn:
It is said that the post-90s and post-00s are generally highly educated, and they pay more attention to credit or something.
Combining these points, Carter naturally thought of this method, and there is a demand here!

"Compared to small loans, the common pawn n, title n and payday n, the loan products we provide for them also have a dislocation competitive advantage!"

"For example, pawn n, what valuables can students have for pawning? The same is true for title n. On a walking campus like Yale, cars are not a necessity. Many Yale students don't buy cars at all! And payday n The interest rate is too high! New York has banned the issuance of payday n, and the bans in Massachusetts and Connecticut are estimated to be soon!"

"It's true that we want to make money, but I haven't been hungry enough to make all kinds of money!"

Thinking of this payday loan called payday n, Carter couldn't help but want to apologize for scolding some small loan platforms for their high interest rates when they didn't understand the market before.

Because in the United States, there are two common small loans specially prepared for customers with low credit ratings.The most similar, the closest to the payday n of the small loan in the previous life, the interest rate is simply frighteningly high!
As a platform and product that can borrow money as long as you are over 18 years old and have a bank account.The repayment cycle of payday loans is usually the next payday, that is to say, usually, the loan period is usually about one month, or even less than one month.And how high can its interest rate be?

In states such as South Dakota and Ohio, which have the highest interest rate caps on small loans, the annual interest rate is usually around 30%.Yes, in states with interest rate caps, the annualized interest rate is 30%
In states without restrictions, such as Missouri, the highest annualized interest rate of payday n can even reach 1950%, nearly 20 times the huge profits!

It is estimated that nine out of nine and thirteen returns are not so ruthless, and the general interest rate of payday n is around 400%.
In a very short borrowing cycle, the borrower usually borrows 375 US dollars, which basically takes only one month, and the repayment needs to be 520 US dollars.It is almost naked usury, but this kind of usury is almost the only loan and financing channel for a large number of Americans, especially the bottom working class
In this environment, a product with a 40% annualized interest rate for customers with low credit ratings.
It's so uncompetitive that it can't be justified!