Posted on 06/17/2016 7:48:07 AM PDT by reaganaut1
Despite Barack Obama’s Hope and Change promises to fundamentally transform the U.S., there remain a great number of Americans who live paycheck to paycheck (when they have work at all). Occasionally, they find themselves in desperate need of short-term credit to avoid a financial disaster, but they don’t have good credit.
One of their options is to get a short-term advance from a “payday lender.” In the typical transaction, a storefront lending business provides a cash advance of a few hundred dollars to the borrower, who promises to repay within one or two weeks with a fee of 15 to 20 percent.
Suppose auto mechanic Joe Smith is short $100 of being able to pay for repairs to his refrigerator. He goes to a local payday lender and gets the $100. When he gets his next check in two weeks, he repays the loan plus $15. To Joe, that’s much better than having the refrigerator break down, costing him a lot of wasted food.
Someone might point out to Joe that the annualized interest rate is usurious and claim that the lender is exploiting him. Joe would probably reply that he doesn’t care because it’s the best option he has. He might even tell the individual to go away and mind his own business.
Unfortunately, Washington, D.C. is full of bureaucrats who think that almost everything is their business, and won’t go away because they have power.
(Excerpt) Read more at forbes.com ...
Hi,
The maximum TN law allows is 17%. Most of the payday loan companies I know of , for competitive reasons, charge something less. (Competition is tough in the payday business) When a person goes to get a mortgage they check around for who has the best rates. People need to do the same with payday loans. Deals can be found. I let new, first time customers borrow money on their first loan for free. Borrow $200 pay back $200. All I ask is they pay it back ON TIME. If they cannot pay back a free loan on time, I think twice about continuing to do business with them. Sometimes I offer deals out of the blue, get a loan on a particular date (say June 27th) get half off on a 2 week loan.
Actually, what payday loans businesses charge are in line with other businesses....retailers that charge 300-800% mark ups. I can rent a car for $50 a day. For 30 days that amounts to $1500. For $1500 I can buy 3 brand new cars for what they are charging me to rent one car.
(I have been making replies to posts that have been made to me, but for some reason they are not making it to the forum. I am not ignoring anyone.)
I'm glad it worked out for you, but I suspect your experience is the exception, not the rule.
I'm glad it worked out for you, but I suspect your experience is the exception, not the rule.
Not a chance.
Its all the extra fees that add up. You sound up and up, but there are many shysters in your field. Seen them up close.
The day they tell you that either your Signature or your Brains will be on that Loan Application Paperwork, is the day you can complain about it. These are Unsecured Loans.
Exactly. Nobody is putting a gun to these peoples’ heads forcing them to take the loans.
In a real market economy there would be better alternatives.
Any real conservative will realize that it is an unsustainable business model to provide loans at the same interest rates to poor credit risks. This is what caused the Fannie Mae debacle. If a business model existed to provide short term loans to credit risky customers, than the "payday loan" outlets would never exist in the first place.
You refused the challenge to open a business providing loans to credit risky people at low interest rates because you know that you would be driven out of business immediately. But you are not man (or woman) enough to admit it.
I liked this forum more when people watched their language.
This Millennial’s “unrealistic expectations”:
-Affording a 1-bedroom apartment.
-Not eating beans and rice or PBJ every meal.
-Being able to visit a dentist and doctor 2x a year.
-Supporting a wife and family with maybe 2-3 kids.
-Having at least 1 weekend day totally free to do maintenance/chores/laundry/etc.
-Not being afraid of being fired daily because the company outsourced us all to Commieland.
And yet you older people wonder why we’re so bitter about growing up and the promises you made us about hard work paying off. Or why we play video games so much in the pitifully little free time we have. Or why we won’t sign up to get shipped off to Whereverstan and crippled or killed defending ‘our way of life.’
GOD@MN IT!
Had two threads open on different tabs. Mods please delete above. Sorry folks!!!
I suspect that payday lenders are being funded by the same Wall Street firms that were funding the exotic mortgage loans during the bubble. That market blew up, this is just another, albeit smaller, high yield market for them to farm. The rates would have been considered usury back when we still had usury laws on the books.
“Any real conservative will realize that it is an unsustainable business model to provide loans at the same interest rates to poor credit risks. This is what caused the Fannie Mae debacle.”
Fannie dealt in conforming paper which by definition doesn’t go to poor credit risks. The high risk market was the object of Fannie’s private sector rivals.
Fannie’s problem was an inadequate capital ratio, not high risk lending.
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