Indirect Lending Pricing Question

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Question:

Regarding Indirect Lending, is there a maximum mark up rate a lending institution can offer when paying out the spread over the buy rate?

Answer:

Your marked-up rate cannot exceed your state's usury ceiling for sales finance contracts. In addition to this legal limit, consider the quality of borrowers who are willing to pay outrageous rates and also the profile of those borrowers who end up paying rates that can be viewed as predatory.

First published on BankersOnline.com 11/15/04