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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

#111

Post by Viliam1234 »

davidhyde wrote: post #86
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…

Your income level does not make you wealthy, it is your capacity to absorb financial speed bumps. At uni, I made less money than some of my peers but I felt wealthier than them. This continued into our professional lives and had nothing to do with our relative income levels. Back then I always had spare cash to spend when an opportunity arose. An unplanned weekend trip away, a celebratory night out, no problem. Sure…

Your capacity to absorb financial speed bumps today is (among other things) a result of your income level yesterday.

I am often surprised how people whose income is the same or greater than mine live in stress, because each extra euro of income is immediately translated into an extra euro of consumption, and there is no reserve for a rainy day.

However, I am not surprised when the same thing happens to people with incomes much smaller than mine. Sometimes I am instead surprised how these people manage to survive at all. (Well, obviously, if I'd ever got in the same situation, I would probably gradually learn a few tricks I don't know today.)

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

#112

Post by ac29 »

arkw wrote: post #49

I interviewed recently at Fig Loans - they are working to dismantle the predatory payday loan industry. Only in a few states at the moment, but doing great things IMO

This is exactly the sort of company the article is about - the APR on their homepage is 190%. Maybe that's better than payday loans, but its still predatory and unscrupulous.

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

#113

Post by blhack »

maxerickson wrote: post #75
blhack wrote: post #59

Earlier quoted context omitted.

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).

There's no need to put people in dorms with shared bathrooms and kitchens. Yeesh. We have plenty enough wealth to house people better than that and not even notice the cost.

How is that yeesh exactly? They’re building these right now in Tempe Arizona, and NOT as dorms for college kids. I absolutely would have loved living in a building like that during my early 20s.

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

#114

Post by ianleeclark »

blhack wrote: post #104
philipov wrote: post #78

Earlier quoted context omitted.

It's actionable by passing laws that limit the upside executives can extract from capital investments and raise minimum wage on large business. There will always be unexpected expenses, so you have to pay people enough to be able to save. Much better than making people dependent on those who control the mechanisms for allegedly limiting unexpected expenses; that's just a plan for increasing social control available t…

People have been trying that for 100 years or so. So far it hasn’t worked.

> People have been trying that for 100 years or so. So far it hasn’t worked.

We didn't even have the minimum wage 100 years ago in the United States. How are you going to deride people for not offering solutions, then, when they offer viable solutions, attempt to magically will-away history?

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

#115

Post by ceejayoz »

geggam wrote: post #90
toomuchtodo wrote: post #63

Earlier quoted context omitted.

And those who don’t quit and still die in the gutter? “Lack of hustle”? Your five decades is a drop in the bucket of human experience. I recommend more empathy and introspection on suffering of your fellow human.

I am not the only person with this perspective. Some very accomplished people agree with me. “Shallow men believe in luck or in circumstance. Strong men believe in cause and effect.” ― Ralph Waldo Emerson You don't know that dying in a gutter was actually better than the other option for their life.

Emerson received a substantial inheritance from his first wife's estate, which gave him built-in income of about $30k/year (inflation adjusted).

Lucky people often prefer to pretend it was all hard work, but that kind of financial cushion makes a big difference.

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

#116

Post by heavenlyblue »

woeirua wrote: post #73
notus wrote: post #5

Earlier quoted context omitted.

I'm not entirely sure what FHA did to the housing market, but as for student loans, yes it wasn't a great outcome, but it is a substantially better outcome than everyone being in debt with high interest rates with predatory lenders.

No, it's not a better outcome than if the market was private because frankly no one would graduate with $150k in debt for a degree in basket weaving if private lenders were backing the loans. A well regulated private market would prevent the extreme situations that we are seeing today. You can make a (somewhat legitimate) argument that we shouldn't require young kids to major in subjects that result in good paying jo…

What does it mean to “fully socialise it” in the context of being from the US?

Do you mean buying out all of the universities?

PS: I come from Europe, studied in the UK when the tuition was capped at £3K/year.

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

#117

Post by downrightmike »

gruez wrote: post #89
bryanlarsen wrote: post #71

Earlier quoted context omitted.

> $100 a month on cable TV given that the average American spends 4 hours/day watching TV[1], that's well under $1 per hour of entertainment. There aren't a lot of hobbies or entertainment media that are cheaper. 1: https://www.statista.com/statistics/186833/average-televisio...

Just because it's cheap doesn't mean there aren't cheaper alternatives. Most people could easily replace that with a netflix subscription for $13, since they already have an internet connection.

Yeah, but then the cable companies will charge you anything over 1TB. And if you have more than 2 screens, because of kids, it will add up, so the cable company will relax that cap IF you also buy cable TV. Remember cable companies are assholes.

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

#118

Post by tempsy »

rootusrootus wrote: post #45
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?

Be careful with balance transfers. At 18 months, a 3% fee is like a 3.75% APR. If the balance transfer is only 12 months, it's about 5.5%. Still a lot better than a subprime installment loan, but a 3% fee is not a 3% APR.

Not sure what you mean by "be careful." That is an extremely cheap loan by any measure.

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

#119

Post by spacecity1971 »

philipov wrote: post #78
blhack wrote: post #74

Earlier quoted context omitted.

How is that actionable? Are you going to show up at Jeff Bezos’s house and rob him?

It's actionable by passing laws that limit the upside executives can extract from capital investments and raise minimum wage on large business. There will always be unexpected expenses, so you have to pay people enough to be able to save. Much better than making people dependent on those who control the mechanisms for allegedly limiting unexpected expenses; that's just a plan for increasing social control available t…

I think, instead of minimum wage hikes etc, that maybe putting a cap on the ratio of CEO pay to entry level employee would work more effectively.

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

#120

Post by dfcagency »

mumblemumble wrote: post #56
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…

This is victim blaming.

Do a little back of the napkin budget on $4,200/month (GENEROUS) take-home pay in say, Fremont, California.

You run out of money real, real quick.

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