Growing Payday Loan Industry Turning to PDL Marketing to Cut Costs and Improve Application Rates.

September 14, 2004 -- The number of U.S. payday-loan outlets doubled to 6,000 during the nineties and predictions now hold that the industry will grow by another 600 percent by the end of the current decade.

With the competition to serve the short-term borrowing needs of the American public heating up, there is growing pressure within the industry to become more efficient in attracting quality borrowers, while keeping fees low and profits high.

That's why the industry has turned to Delaware-based PDL Marketing for help in finding qualified payday loan applications and keeping operating costs low.

"On average, we're slashing marketing costs for these lenders by 58%," says Don Nusser, Sales Director at PDL Marketing. "And not just by lowering the cost of generating applications. We're also able to take the same marketing budget and dramatically drive-up the number of new applications it can generate for our lending customers. We have taken several clients from $100,000 a month in new loans to over $3 million in just 6 months."

PDL offers lenders three types of marketing services:
Lead Generation Services, selling quality, unique applications for just $18 per lead.

Web Development Services:
Designing better-looking and better-functioning websites that have proven to double and triple lenders' conversion rates. PPC & SEO Management Services: building traffic to existing sites through a proprietary online marketing system.

In a typical payday loan transaction, the borrower will write a check to the lender for the loan amount, plus the lender's fee. The lender agrees to hold the check until the customer's next payday, up to 30 days. For example, if borrower requires $100 he writes a check for the $100, plus a fee of say, $22. The lender immediately deposits $100 in the borrower's checking account. At the borrower's next payday, say, 15 days, the lender cashes the check and collects the fee.

Some may point to high interest rates charged in this type of transaction. In the example above the APR is 535%. However, this is not out of line with what banks typically charge for small-dollar transactions. For instance a $1.50 fee on a $100 ATM transaction, would be 548% APR and a $22 Non-Sufficient Funds bounced check fee on a $100 check would be 8,030% APR.

Not only are traditional banks just as likely to charge high fees for small, short term transactions, they are much more likely to turn their backs on the type of borrower who relies on payday loans to pay bills while avoiding bounced checks or loss of basic services.

The banking industry often will not even open branches in lower income areas where a payday loan borrower typically resides. The average household income of a payday loan applicant is under $25,000 according to industry surveys.

"These finance companies are picking up the slack left from the savings and loans," says Arthur B. Kennickell, an economist for the Federal Reserve Bank. "It is part of the continuing restructuring of the industry." Complaints among borrowers are few because consumers understand what they are doing and are doing it willingly for the service given.

PDL Marketing steps in to create efficiencies in how borrowers and lenders meet. For more information, please visit http://www.pdlmarketing.com





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