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Online installment loans have taken the subprime market by storm

bloomberg.com

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Re: Online installment loans have taken the subprime market by storm

#51

Post by streblo »

notus wrote: post #2

I feel like the government should be offering some type of non predatory debt relief comparable to this. This service is only a detriment to the borrower due to the crazy high interest rates, but I think the government could break even with much more reasonable interest rates, consumers would be better off financially, and the predatory industries would disappear since they can't compete.

Why can't the government just regulate the parameters of lending? Isn't that sufficient? Why does the government have to actually get into the business to help solve the problem?

Re: Online installment loans have taken the subprime market by storm

#52

Post by wintorez »

tw04 wrote: post #50
blhack wrote: post #35

Okay these loans certainly sound like a bad deal, but what are people supposed to do? Say your car breaks and you can’t get to work. For all of us here billing out >$100hr or whatever your local consulting rate is, the answer is some calculus around the cost of losing your job vs the cost of fixing it. But for MOST people, the cost of fixing it is functionally infinite. They literally do not have even a few hundred d…

You had me until: > Yeah, they know the loan is bad. They probably don’t have any other options. I think it’s a pretty poor assumption to assume all the people taking out these loans understand exactly what they’re getting into, and what other options they may have. I think there should be a mandatory 20 minute education session for anyone taking out a payday loan/installment loan.

I think his point was "what other options do they have?". The cost of for example not fixing their car is infinite, so they'll accept anything to get that fixed.

Re: Online installment loans have taken the subprime market by storm

#53

Post by geggam »

toomuchtodo wrote: post #33
__blockcipher__ wrote: post #28

Earlier quoted context omitted.

What a horrifically uncharitable assumption to make. Why not just actually argue the point you want to make rather than resorting to not-so-subtle personal attacks?

It’s uncharitable to have a disdain for those without empathy when a large component of success is luck? If you think success is guaranteed with grit and hard work, you are woefully misinformed. You can do everything right and still fail hard. “Personal responsibility” is a dog whistle for the willful ignorance of the necessity of government regulation and social safety nets.

Granted I only have 5 decades of perspective but I have noticed people who get lucky tend to be the ones who dont quit.

The ones who quit tend to call those who dont quit lucky.

Re: Online installment loans have taken the subprime market by storm

#54

Post by thrower123 »

This seemed to be a very vague article. I'm assuming that people that take advantage of these loans must have quite bad credit, or otherwise they'd be going the LendingTree/LendingClub option, where you can usually get medium term personal loans up to about $20k at under 10% interest?

Re: Online installment loans have taken the subprime market by storm

#55

Post by [deleted] »

S_A_P wrote: post #15
MuffinFlavored wrote: post #12

What's HN's opinion on 0% balance transfers? Yes, there's usually a 3% fee but... I've been able to borrow about $5k-$12k for a one time 3% fee over 18 months multiple times in a row now. I make sure to always pay the balance back before it is due. Why don't more people who need a cash infusion do this?

there is usually an asterisk next to those offers* *well qualified applicants only...

[deleted]

Re: Online installment loans have taken the subprime market by storm

#56

Post by mumblemumble »

blhack wrote: post #35

Okay these loans certainly sound like a bad deal, but what are people supposed to do? Say your car breaks and you can’t get to work. For all of us here billing out >$100hr or whatever your local consulting rate is, the answer is some calculus around the cost of losing your job vs the cost of fixing it. But for MOST people, the cost of fixing it is functionally infinite. They literally do not have even a few hundred d…

I don't want to tut-tut the poor, but I do want to tut-tut consumer culture in general.

There are a whole lot of people who _should_ be able to afford an unexpected car repair bill, and could quite easily do so, if they weren't spending $100 a month on cable TV, $800 every other year on a high-end smartphone, $500/month on owning an SUV when a $200/mo economy car would serve just fine, etc., and put the money into a basic rainy day fund instead.

And a middle and working class that was just a little bit more frugal might create some downward pressure on prices that would, in turn, alleviate what less wealthy people need to pay on just the basics.

Re: Online installment loans have taken the subprime market by storm

#57

Post by ceejayoz »

kirykl wrote: post #29
notus wrote: post #7

Earlier quoted context omitted.

If filing for bankruptcy had no negative consequences I would agree, but that isn't the case. I agree that we shouldn't be bailing out banks, but we should have a safety net to bail out individuals. People go broke for various reasons, but the hallmark of an accomplished society is being able to ensure a decent quality of life for most people. Telling people to accept personal responsibility for everything that happe…

What are the negative consequences of filing for bankruptcy for the individual? If you're at the point where bankruptcy is recommended, it's only up from there. They are either discharged of their debt or able to protect a house thru a payment plan.

Might have trouble finding an apartment. The lowered credit score will probably cause increased costs for things like car insurance. Life insurance may be a no-go. Employers in some industries do credit checks, too.

It's a good option in crushing debt, but it's not without significant mid-term downsides.

Re: Online installment loans have taken the subprime market by storm

#58

Post by Reedx »

blhack wrote: post #35

Okay these loans certainly sound like a bad deal, but what are people supposed to do? Say your car breaks and you can’t get to work. For all of us here billing out >$100hr or whatever your local consulting rate is, the answer is some calculus around the cost of losing your job vs the cost of fixing it. But for MOST people, the cost of fixing it is functionally infinite. They literally do not have even a few hundred d…

> cheaper transportation options, cheaper access to healthcare or preventitive care, predictive diagnostics, etc.

I'd also add teaching financial literacy/strategy in school. A lot of mistakes could be avoided. I learned the hard way and it took a long time to dig myself out. There's a lot that would've been very useful to have known earlier.

Re: Online installment loans have taken the subprime market by storm

#59

Post by blhack »

philipov wrote: post #47
blhack wrote: post #35

Okay these loans certainly sound like a bad deal, but what are people supposed to do? Say your car breaks and you can’t get to work. For all of us here billing out >$100hr or whatever your local consulting rate is, the answer is some calculus around the cost of losing your job vs the cost of fixing it. But for MOST people, the cost of fixing it is functionally infinite. They literally do not have even a few hundred d…

> Instead we should be looking at ways to make it so that giant unpredicted expenses don’t happen at all. Or maybe fix it from the other end: reduce inequality so fewer people are living paycheck to paycheck and can actually build savings to use for unpredicted expenses.

I’m sorry but this is a ridiculous, unactionable answer that is functionally equivalent to “well we should make things better”. Yes of course we should, HOW? We need more innovative solutions to these problems.

I like seeing electric bicycle shares, I like seeing community-based, high density housing with shared kitchens and bathrooms, I like predictive diagnostics and telemedicine (although the FDA is fighting it).

Re: Online installment loans have taken the subprime market by storm

#60

Post by Litmus2336 »

streblo wrote: post #51
notus wrote: post #2

I feel like the government should be offering some type of non predatory debt relief comparable to this. This service is only a detriment to the borrower due to the crazy high interest rates, but I think the government could break even with much more reasonable interest rates, consumers would be better off financially, and the predatory industries would disappear since they can't compete.

Why can't the government just regulate the parameters of lending? Isn't that sufficient? Why does the government have to actually get into the business to help solve the problem?

Because, theoretically, these companies would not be profitable if their interest rates were regulated, and therefore nobody would offer loans.

But I don't have statistics on default rate or anything of that sort.

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