PHOENIX, Dec. 8 /PRNewswire-FirstCall/ -- Hampden Group, Inc. (OTC: HPNG)
has launched a new vehicle sub-prime finance program to compete in the recent
exploding growth of the vehicle title loan industry. Hampden Group believes
it has a solution for current title loan borrowers that pay interest rates of
typically 200-300%. Quick-cash loans are creating bigger problems than they
are solving. Auto title loans come with a high price tag in the form of
expensive fees and triple-digit interest rates. Hampden Group, Inc. has
started a no credit check vehicle title loan refinance program. The company
also announced that wholly owned subsidiary, Pre-Paid Motors, Inc., has
received approval for its banking license.
Hampden Group, Inc. has created an innovative finance solution that offers
vehicle title loan and title loan refinancing at discounted interest rates.
Title loans are becoming extremely popular for short-term cash and lenders are
popping up across the country. Borrowers use auto title loans as a short-term
money solution which can become a long-term problem. There are few solutions
for those who can't keep up with interest payments and face possibly losing
their car. Hampden Group, Inc. offers same-day vehicle title loans or title
loan refinancing for a fraction of the average industry rate.
"Most people have run into short-term cash-flow problems," said Michael
Raburn, CEO of Hampden Group, Inc. "Those who elect to take out an auto title
loan solve short-term issues but it becomes a long-term problem; we can offer
a solution," continued Raburn. "Customers can get money today with fair
interest rates. We are declaring war on the competition and we plan to take
their customers away from them," said Raburn.
A title loan is a loan against a clear vehicle title that can generally be
funded the same day. Title loan companies target people who own their
automobiles outright. The title loan company lends the consumer several
thousand dollars at enormous interest rates (typically 200-300%) and gets the
title to the vehicle as collateral. Most title loan companies use balloon
payments to the disadvantage of the consumer. A $3,000 auto title loan will
require the consumer to pay $400 monthly for seven months and then a $3,000
balloon payment in the eighth month. When the consumer is unable to pay the
large, final balloon payment, which happens in the bulk of title loans, the
title loan company repossesses the vehicle and sells it.
Hampden Group, Inc. wants to be the first to market a solution because
many title loans end up in repossession. The company will lend $1,500 to
$50,000 on clear vehicle titles and charge significantly less interest. The
program also allows borrowers to convert into a conventional 24-month loan at
an even lower interest rate if the loan is not paid in full after 90 days.
The company foresees this division as a solution for an industry that's
getting out of control.