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Message
re: Payday Lending
Posted on 2/16/16 at 2:56 pm to LSUAfro
Posted on 2/16/16 at 2:56 pm to LSUAfro
quote:
Because if there was a profitable answer, it would be in operation.
Right, which means of course now the taxpayers pick up the full tab.
So now I'm curious at what interest rate we got to pick up the tab.
On and on.
0
Posted on 2/16/16 at 2:57 pm to Teddy Ruxpin
quote:
Now the question is, "what rate is usury?"
Leave that up to the states to decide. I would say anything over 100% would be considered usury.
Posted on 2/16/16 at 2:57 pm to VABuckeye
quote:
It saddens me to see these places and cash for title places always near military bases.
You cannot use a payday loan with your military pay. The Civil Servant Relief Act puts a cap on interest rates for service members which these payday places cannot meet.
quote:
Speaking of "Buy Here, Pay Here"... Did y'all know they sometimes out GPS trackers that can disable the vehicles and let them know the location for easy recovery
Every major auto manufacturer has loan program that does something like that.
Ford has a plan that if you are a day late on your payment you get a beep every 5 minutes you have the car on, two days late it is every minute, three days late and it is every 30 seconds, 4 days and it is constant, and you car won't start on the 5th day so the recovery guy can easily go pick it up.
Posted on 2/16/16 at 3:05 pm to stevengtiger
A guy that used to work with me that made about 70k a year and his wife brought in about $800 a month in child support. They couldn't manage money for shite and got caught up in the Payday lending. They didn't own a house (rented) didn't have any car notes either. They would spend money on the dumbest stuff like always buying the latest new TV, Camera's, laptops, etc. They always bounced checks at Walmart and did the payday loan every paycheck to payoff the bounced checks. I never felt sorry for the guy because he dug the whole and could have easily climbed out.
I remember when he was leaving the company he owed about 4k on his AMEx and showed up at work with a 1k new Nikon camera showing it off. The company had to take his last paycheck and vacation check to pay off the AMEx
I remember when he was leaving the company he owed about 4k on his AMEx and showed up at work with a 1k new Nikon camera showing it off. The company had to take his last paycheck and vacation check to pay off the AMEx
This post was edited on 2/16/16 at 3:08 pm
Posted on 2/16/16 at 3:08 pm to stevengtiger
The people who use Payday loans have a long history of default. The reason they are charged outrageous fees is because the risk by the loan company is HUGE.
I went to small claims court to sue a photographer for 1K. There were 10 cases before mine. All of them were payday loan default cases. None of the people who took out the loans showed up.
It's what deadbeats do. I needed money to pay bills after my divorce. I got a 90 day note from my bank for 6% interest. People who need payday loans are low life scum.
I went to small claims court to sue a photographer for 1K. There were 10 cases before mine. All of them were payday loan default cases. None of the people who took out the loans showed up.
It's what deadbeats do. I needed money to pay bills after my divorce. I got a 90 day note from my bank for 6% interest. People who need payday loans are low life scum.
Posted on 2/16/16 at 3:16 pm to Zach
quote:
People who need payday loans are low life scum
That's a little harsh and your an a-hole for saying it. A friend of mine did it because her a-hole Husband ruined their credit and left her with nothing. She was too proud to ask anyone else for help.
Posted on 2/16/16 at 3:32 pm to lsufan1971
quote:
That's a little harsh and your an a-hole for saying it. A friend of mine did it because her a-hole Husband ruined their credit and left her with nothing. She was too proud to ask anyone else for help.
Who forced your friend to marry an a-hole?
Posted on 2/16/16 at 3:39 pm to Zach
quote:
People who need payday loans are low life scum.
Majority of users are women, minority and live at or below the poverty line. House hold income less than $40,000.
Obviously, there are a lot of people that use these services that are assholes but truth is, there are a lot that just get caught up in debt. Could and does happen to anyone.
Posted on 2/16/16 at 3:48 pm to stevengtiger
It's a scam and should be outlawed. No one should be allowed to take that much of advantage over the poor and dumb.
Posted on 2/16/16 at 3:50 pm to stevengtiger
I find them to be terrible establishments. That being said, I am not a customer, nor would I ever be, so I am not one of the people keeping them open. Instead of bitching about places like this, help educate the public.
I make sure to tell my friends/family about the fricking pathetic places that charge a percentage to do their taxes, and how their version of the payday loan is awful.
I make sure to tell my friends/family about the fricking pathetic places that charge a percentage to do their taxes, and how their version of the payday loan is awful.
Posted on 2/16/16 at 3:51 pm to stevengtiger
These are people in Dave Ramsey's target market.
Posted on 2/16/16 at 3:51 pm to stevengtiger
quote:
Could and does happen to anyone.
I disagree. Could and does happen to people who make poor decisions over a period of time. There are consequences to stupidity.
Posted on 2/16/16 at 4:01 pm to Old Sarge
quote:
No one should be allowed to take that much of advantage over the poor and dumb.
I don't understand this mentality.
It's not the Government's job to protect people from stupid decisions and enacting more laws will only create more opportunity for Uncle Same to frick with people. It amazes me that people encourage more laws and regulation when we can't trust our Government with the laws on the books now.
Look how well civil asset forfeiture is working out protecting the general public from drugs. Municipalities are using it like Gestapo to rob innocent people.
Posted on 2/16/16 at 4:40 pm to stout
quote:
It's not the Government's job to protect people from stupid decisions and enacting more laws will only create more opportunity for Uncle Same to frick with people. It amazes me that people encourage more laws and regulation when we can't trust our Government with the laws on the books now.
It's not always stupidity, but ignorance. There is a difference. For a 20ish year old that has lived in a rental home all his/her life, with a parent(s) living paycheck to paycheck, how are they supposed to know how banking, credit, and interest rates work? Hell, I came from a middle class home my parents owned, had a checking account when I was 15, and I was clueless about credit when I was in college. One bad decision out of ignorance can financially cripple someone that is already not well equipped to gain a well paying job. These are the type of people that usually fall into the payday loan cycle.
I mean we have laws in place to protect educated people from being scammed by the banks, but we can't enact some laws to protect the less informed from these predatory lenders? Come on...
Posted on 2/16/16 at 5:01 pm to stevengtiger
Should it be legal?: probably not.
Are the rates usurious?: probably not.
As with everything in finance, markets are efficient. If they were really charging way too much, then someone would get in and push rates down. If it was really bad, why doesn't the Catholic Church start lending at a fair rate and help these poor people out?
They are making 500% interest, but they have to because the cost of keeping a business where criminals know there is a lot of cash in the building safe from crime isn't cheap. You are making absurdly small loans to people who have ruined every other source of financing they have, so guess what.... The default rates are incredibly high. If one in 5 defaults and the loans average a week in length, that's a 1,040% default rate on an annualized basis (using the same annualization here that was used to calculate the 500% interest.
Think about that. Every dollar you have to lend out will be defaulted on 10 times a year.
Going to collect the money is expensive, as the court costs are more than the principle amount.
The alternative to the business is loan sharking, which has the same interest rates and their repo guys break legs.
The reality is that these people are too stupid to not screw themselves at every chance.
The question is whether you think the government should be in the business of telling you what you can and can't do with your money.
Are the rates usurious?: probably not.
As with everything in finance, markets are efficient. If they were really charging way too much, then someone would get in and push rates down. If it was really bad, why doesn't the Catholic Church start lending at a fair rate and help these poor people out?
They are making 500% interest, but they have to because the cost of keeping a business where criminals know there is a lot of cash in the building safe from crime isn't cheap. You are making absurdly small loans to people who have ruined every other source of financing they have, so guess what.... The default rates are incredibly high. If one in 5 defaults and the loans average a week in length, that's a 1,040% default rate on an annualized basis (using the same annualization here that was used to calculate the 500% interest.
Think about that. Every dollar you have to lend out will be defaulted on 10 times a year.
Going to collect the money is expensive, as the court costs are more than the principle amount.
The alternative to the business is loan sharking, which has the same interest rates and their repo guys break legs.
The reality is that these people are too stupid to not screw themselves at every chance.
The question is whether you think the government should be in the business of telling you what you can and can't do with your money.
Posted on 2/16/16 at 5:23 pm to stevengtiger
quote:
I would like to see some type of legislation to make it harder for these businesses to rip people off
It's unclear that they are getting ripped off.
The loan amounts are small, but the cost of extending a loan profitably is not necessarily that small. It costs a certain amount to do any due diligence on a new customer, and that amount will be a larger fraction of a smaller loan amount.
And as has already been mentioned, most of the potential customers have already demonstrated they don't plan or handle money very well, so the risk of default is higher.
All this taken together, and I'm not at all surprised the rates are very high compared with "regular" personal loans.
Posted on 2/16/16 at 5:42 pm to stevengtiger
They are illegal here in AZ. When that law went into effect a few years ago many of those payday loan places just turned into Title Loan places.
Posted on 2/16/16 at 6:43 pm to The Spleen
Question:
Answer:
And before you get all weak on me claiming how can stupid parents help their stupid child. I like to point out that Clarence Thomas' grandfather had little education, and yet, you don't see Clarence at the PayDay loan shop do you?
The parents only need to be smart enough to raise their children to appreciate education. Its quite the minimal hurdle to ask members of civilized society.
quote:
For a 20ish year old that has lived in a rental home all his/her life, with a parent(s) living paycheck to paycheck, how are they supposed to know how banking, credit, and interest rates work?
Answer:
quote:
parents
And before you get all weak on me claiming how can stupid parents help their stupid child. I like to point out that Clarence Thomas' grandfather had little education, and yet, you don't see Clarence at the PayDay loan shop do you?
The parents only need to be smart enough to raise their children to appreciate education. Its quite the minimal hurdle to ask members of civilized society.
This post was edited on 2/16/16 at 6:47 pm
Posted on 2/16/16 at 7:39 pm to stevengtiger
I don't know if I feel bad for these people. Don't take out loans you can't pay back. Pretty simple. They tell you want the rate is. i have never been broke or had to take out these type of loans? Am I rich? No effing way. I don't spend what I don't have. I don't crap out kids either.
These businesses are sleazy though
These businesses are sleazy though
This post was edited on 2/16/16 at 7:40 pm
Posted on 2/16/16 at 7:54 pm to danilo
Where will these borrowers go for money if the payday loan business is shut down?
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