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Pay Day Loans

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  • #16
    Originally posted by Christianbookworm View Post
    What about the usury component?
    Usury tends to be bad, but it's necessary when there is otherwise no incentive for large amounts of money to be made for loan.

    Like an interest rate no higher than say 10%?
    It may help a little but it'll just drive most of the lending underground.

    Comment


    • #17
      Another consideration is that the interest rates are expressed as ANNUAL percentage rates, APR, but the payday loans are very short term, only a few days. So if they are charging you say 10% for a 5 day loan, that could be an APR of 300%. So while it looks like a crazily high interest rate (in APR) it might actually be reasonable for the loan period of a few days.

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      • #18
        Anybody know what the default rate is?
        Watch your links! http://www.theologyweb.com/campus/fa...corumetiquette

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        • #19
          Originally posted by DesertBerean View Post
          Anybody know what the default rate is?
          Apparently as of 2011, it was 6%. The author calculates that a 72% yearly rate (without compounding) would be needed just to cover this. While we know payday loans are not designed to "last" this long, the sort of circumstances that might require them (such as what Bill mentioned them) are likely to make rapid payoff impossible (to say nothing of the many people, maybe a high majority, who don't understand the financial ramifications of what they are doing).

          http://www.forbes.com/sites/timworst...-so-expensive/
          "I am not angered that the Moral Majority boys campaign against abortion. I am angry when the same men who say, "Save OUR children" bellow "Build more and bigger bombers." That's right! Blast the children in other nations into eternity, or limbless misery as they lay crippled from "OUR" bombers! This does not jell." - Leonard Ravenhill

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          • #20
            Originally posted by DesertBerean View Post
            Anybody know what the default rate is?
            I heard default rates varying from 6% to 20%. It might depend on the length of the loan, location of the payday lender (might be easier for a soldier to default if he borrows the money, knowing he is being shipped overseas before it it due for example)

            There are also a lot of overhead costs in the business: an office, security, personnel, etc.

            So it's not a clearcut case of payday loan companies being loan sharks. They are ripped off quite a bit themselves, and they have to recoup the losses by charging it to other customers. That said, I don't think I would ever borrow money from one of them.

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            • #21
              Originally posted by Sparko View Post
              I heard default rates varying from 6% to 20%. It might depend on the length of the loan, location of the payday lender (might be easier for a soldier to default if he borrows the money, knowing he is being shipped overseas before it it due for example)
              Which, sadly, destroys his credit for when he comes home to try to buy a house.
              The first to state his case seems right until another comes and cross-examines him.

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              • #22
                Originally posted by Cow Poke View Post
                Which, sadly, destroys his credit for when he comes home to try to buy a house.
                Maybe you don't know Freddie Mac? (Not an endorsement, just curious.)
                The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

                [T]he truth I’m after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -— Marcus Aurelius, Meditations

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                • #23
                  At some point I want to do a study of every reference to usury in the Bible. I'd post it here.
                  "I am not angered that the Moral Majority boys campaign against abortion. I am angry when the same men who say, "Save OUR children" bellow "Build more and bigger bombers." That's right! Blast the children in other nations into eternity, or limbless misery as they lay crippled from "OUR" bombers! This does not jell." - Leonard Ravenhill

                  Comment


                  • #24
                    Originally posted by Truthseeker View Post
                    Maybe you don't know Freddie Mac? (Not an endorsement, just curious.)
                    Lots of people go through HUD to buy a house. Its not a bad program. Its not Fannie or freddie. Its decent and really well done IMO
                    A happy family is but an earlier heaven.
                    George Bernard Shaw

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                    • #25
                      Everything that the government does incurs a cost. Nearly nobody is afraid the cost in any particular case is too high. It's as though we the people always assume the cost of government action is acceptable.
                      The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

                      [T]he truth I’m after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -— Marcus Aurelius, Meditations

                      Comment


                      • #26
                        Originally posted by Truthseeker View Post
                        Everything that the government does incurs a cost. Nearly nobody is afraid the cost in any particular case is too high. It's as though we the people always assume the cost of government action is acceptable.
                        Not always. Most people purchase their first homes through FHA/Hud. Its a low interest loan that must be paid back rather than a grant. To assume that most people do not weigh the cost of using a government program is somewhat silly. Most of the people I know or are in my social circles are aware of the cost of a government loan or grant. Quite frankly they exist when a person needs them, not to be taken advantage of. Because of the heartless in society, some programs we couldn't do without such as disability and food assistance. However, I am certainly aware of the cost. I do pay my taxes, and I have also had to use such programs out of need. Neither am I embarrassed for it.
                        A happy family is but an earlier heaven.
                        George Bernard Shaw

                        Comment


                        • #27
                          Originally posted by Catholicity View Post
                          Not always. Most people purchase their first homes through FHA/Hud. Its a low interest loan that must be paid back rather than a grant. To assume that most people do not weigh the cost of using a government program is somewhat silly. Most of the people I know or are in my social circles are aware of the cost of a government loan or grant. Quite frankly they exist when a person needs them, not to be taken advantage of. Because of the heartless in society, some programs we couldn't do without such as disability and food assistance. However, I am certainly aware of the cost. I do pay my taxes, and I have also had to use such programs out of need. Neither am I embarrassed for it.
                          I rather doubt you know what I mean by the cost of any given government action. Or what the entire cost of our governments around the world is. We have a great deal of "governance," now, yet most of the world remain impoverished. The middle class of the USA is shrinking while the 1% of the 1% of American people is taking more and more control of the world's resources. Guess how those fat cats managed that? They controlled our governments and used them to seize ever more control of the resources by finagling the legal system and the money system.

                          I've only just begun to get started. For one thing, argendo, we have yet to agree to start with the assumption that all the people working in government really do want to make the world better for the people of the world and are highly intelligent and competent.
                          The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

                          [T]he truth I’m after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -— Marcus Aurelius, Meditations

                          Comment


                          • #28
                            Originally posted by Sparko View Post
                            Another consideration is that the interest rates are expressed as ANNUAL percentage rates, APR, but the payday loans are very short term, only a few days. So if they are charging you say 10% for a 5 day loan, that could be an APR of 300%. So while it looks like a crazily high interest rate (in APR) it might actually be reasonable for the loan period of a few days.

                            Don't they also roll in the cost of making the loan too? Like, it might cost $20 to do the paperwork, and then say 10%. But that $20 is a big part of the cost incurred, thus making it look like a big rate.
                            No Silicon Heaven? Preposterous! Where would all the calculators go?

                            Comment


                            • #29
                              Originally posted by Truthseeker View Post
                              I rather doubt you know what I mean by the cost of any given government action. Or what the entire cost of our governments around the world is. We have a great deal of "governance," now, yet most of the world remain impoverished. The middle class of the USA is shrinking while the 1% of the 1% of American people is taking more and more control of the world's resources. Guess how those fat cats managed that? They controlled our governments and used them to seize ever more control of the resources by finagling the legal system and the money system.

                              I've only just begun to get started. For one thing, argendo, we have yet to agree to start with the assumption that all the people working in government really do want to make the world better for the people of the world and are highly intelligent and competent.
                              Correct for one thing I am not now nor have ever been a conspiracy theorist.
                              A happy family is but an earlier heaven.
                              George Bernard Shaw

                              Comment


                              • #30
                                Originally posted by Catholicity View Post
                                Correct for one thing I am not now nor have ever been a conspiracy theorist.
                                Does that mean you think conspiracies are not real, like mermaids, unicorns, leprechauns? Maybe no amount of conspiracy evidence will ever sway your belief.
                                The greater number of laws . . . , the more thieves . . . there will be. ---- Lao-Tzu

                                [T]he truth I’m after and the truth never harmed anyone. What harms us is to persist in self-deceit and ignorance -— Marcus Aurelius, Meditations

                                Comment

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