Explosive 1000% Rental Business Breakdown

714 High-interest Loans, weekly interest 30%, annualized rate 1500%+, with head-cutting interest.

Borrow 2000 yuan, receive 1400 yuan, pay 600 yuan interest weekly.

At the peak, almost all domestic universities were affected, especially technical colleges, with many students borrowing high-interest loans.

Everyone borrows money for one purpose: consumption, buying phones.

The stupidity of college students exceeds imagination.

The vanity of college students is boundless.

A large number of practitioners became wealthy quickly, achieving financial freedom in just two years. This development was too rapid and was completely banned; lending to students is illegal.

What about renting?

They are also just using money to buy phones, so why not just give the phones directly?

Thinking differently, with simple packaging, ordinary leasing business becomes high-interest lending, perfectly bypassing regulations.

Next, brother will analyze this process in detail.

Logic of normal leasing:

Platform profit: making money by renting out phones. After recycling, phones can be refurbished for rent again or sold second-hand.

User behavior: users need the right to use the phone, and after the lease ends, they return, renew, or buy out.

Logic of phone leasing loans:

Core premise: the platform doesn’t care whether it can recover the phone, but aims to earn rent far exceeding the phone’s value (essentially interest).

For example, market price of phone: 10,000 yuan

Total rental price (nominal rent + buyout fee): 15,000 yuan.

Paid in 12 installments, each installment is 1,250 yuan. But the first payment includes prepayment costs (such as 2-3 months’ rent + service fee), e.g., a down payment of 3,000 yuan.

User operation:

1. User pays 3,000 yuan down payment and receives the phone.

2. User immediately sells the phone to a recycler, getting about 9,000 yuan.

3. Actual cash received by the user: 9,000 yuan (sale proceeds) - 3,000 yuan (initial down payment) = 6,000 yuan.

4. But the user takes on a debt of 15,000 yuan, to be repaid in installments.

User:

Cash received: 6,000 yuan.

Debt: 15,000 yuan.

Essentially: borrowed a 6,000 yuan loan, but the principal is 15,000 yuan, with interest up to 9,000 yuan. The actual annualized interest rate exceeds 1000%.

Platform:

Expenses: purchase cost of phones 10,000 yuan.

Total income: 3,000 + 12,000 = 15,000 yuan.

Gross profit: 15,000 - 10,000 = 5,000 yuan.

The platform doesn’t care where the phone is or the user’s sale behavior; it just saves the trouble of recycling. What the platform wants is the continuous cash flow from user repayments. Selling the phone is actually a good thing.

User’s down payment: 3,000 yuan (received immediately).

User’s subsequent installment repayment: 12,000 yuan (assuming the user continues to pay).

Intermediary: earns commission, a few hundred yuan per deal.

Recycler: receives 9,000 yuan for the phone, which re-enters the leasing market.

Will the lessor (platform) lose money?

Total rent far exceeding the phone’s value (essentially high-interest loan principal and interest).

Extremely high interest rates are enough to cover bad debts.

The real risk for the platform is people refusing to repay, i.e., borrowing from the loan shark.

Industry practice is high down payments, short cycles, blacklisting data, gentle collection to improve repayment rates.

As long as bad debt rate is controlled within a certain range, this model is highly profitable.

This model was doing very well until exposed by the media.

That media editor wrote very poorly, so brother had to write a piece to clarify the key points.

Would anyone really borrow at 1000% interest and repay?

Back then, the 714 high-interest loans reached an annualized rate of 1500%, many people borrowed, so don’t underestimate the number of fools.

There are far more fools in this world than you think.

Refuse high-interest loans! **$PHB **$ARB **$CKB **