Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Online installment loans have taken the subprime market by storm

bloomberg.com

Post reply on HN
Print view View original

121–130 of 329 posts

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

#121

Post by heavenlyblue »

geggam wrote: post #43
specialp wrote: post #27

Earlier quoted context omitted.

Conversely if overextending yourself for whatever reason had no consequences, it would be to your disadvantage not to overextend yourself. How do we determine who should be "bailed out"? Seems the issues that are unavoidable that could cause ruin (illness/disability) should be addressed at a higher level than borrowing money with no recourse.

I have no issues with socialized medicine. In fact the fact remains medicare is actually the one functioning health insurance we have because the govt sets the rates that can be charged. Unregulated healthcare is silly since people dont have a choice about their health ( not discussing the food choices ) People do have a choice about borrowing money.

Health is going to become a bigger problem once we reach a point in the development of our medicine when we could literally heal anyone.

Right now government-subsidised healtcare works because keeping yourself healthy simply can not be externalised to the government. But what if I could spend the beat of my years being a coke-snorting socialite hoping to meet someone at one of those parties who would make my life?

20-year alcoholic? Let us grow you a liver for the total of $2M of taxpayer’s money.

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

#122

Post by tboughen »

reverend_gonzo wrote: post #100
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...

Huh? Books, sports, art, music, are all way cheaper forms of entertaining oneself. Most hobbies or entertainment don't have a charge per hour.

I think the charge per hour aspect reflects the amortised cost of engaging in the activity.

Books can be free if borrowed from a library - but ownership has an ‘hourly cost’

Mind sports like chess have an insanely low hourly cost, but regular sports that involve consumables like trainers have an hourly cost.

Music is free if you sing, but otherwise involves buying and maintaining an instrument. Strings, for example are consumables.

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

#123

Post by philipov »

spacecity1971 wrote: post #119
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…

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.

I think that falls under the umbrella of limiting the upside executives can extract from capital investments. It's not an either-or proposition, though. Minimum wage or something like it is needed to make sure that money goes to workers rather than shareholders.

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

#124

Post by hnuser77 »

blhack wrote: post #74
philipov wrote: post #66

Earlier quoted context omitted.

How about paying people more? That's pretty actionable. Jeff Bezos doesn't need 100 billion dollars. "Just get rid of unexpected expenses" is the one that sounds ridiculous to me.

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

History is replete with the sudden removal or transfer of "private" property [1,2]. I'm not saying that this is good thing economically or morally, but when people get mad they vote for Hugo Chavez or whoever. I think this is highly unlikely in the US right now: in a "how many divisions does Jeff Bezos have" argument, I'm pretty sure you could make a case for the answer being "greater than zero" given regulatory capture and general financial/corporate influence on government.

[1] https://en.wikipedia.org/wiki/Land_reforms_by_country

[2] https://en.wikipedia.org/wiki/List_of_nationalizations_by_co...

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

#125

Post by chasd00 »

adamredwoods wrote: post #70
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).

Peer-to-peer unsecured micro-loans at low interest rates, instead of GoFundMe.

an unsecured loan at a low interest rate doesn't make sense.

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

#126

Post by Cd00d »

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…

In the datasets I use at work, I'm seeing these or similar credit not for emergency solutions, but rather for luxury consumption (the very poor aren't likely to be in our panels).

People are buying Peloton bikes, exotic vacations, and luxury purses, and hoping to pay that debt off in installment plans.

I worry about when enough people hit the tipping point where their monthly minimums on deeply depreciated goods are too much to be able to make.

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

#127

Post by geggam »

ianleeclark wrote: post #108
geggam wrote: post #102

Earlier quoted context omitted.

I was hoping for more insight than "my employer doesnt pay enough" ... while true its not really a root cause of the situation IMO You can always start your own business or simply work for a different company. No one owes you employment.

> You can always start your own business How is starting your own business an even remotely viable option for people who are so desperate that they're taking these predatory loans?

Several things come to mind here.

What is stopping them from starting the business ? Govt regulations ? Are you saying big govt is preventing you from starting a business ? Do you think more govt will fix the problem ?

Govt regulations dont stop undocumented immigrants from coming here to work. They come from a place where govt regulations dont stop them from starting a business.

What is the answer ?

More social programs or less ? Or is it the fact the undocumented immigrants arent quitting ?

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

#128

Post by heavyset_go »

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…

> 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

People get private loans for bullshit degrees all of the time. Lenders don't care, because private student loans are non-dischargeable.

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

#129

Post by tempsy »

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?

I've strategically used 0% BT offers in the past. Agree if you need a loan it's the cheapest personal loan you can get by far. The obvious catch is that you need a plan to pay it off completely in 18 months (or subject yourself to nearly 30% interest, which is what the credit card company is hoping for).

The biggest downside vs a traditional installment loan is that having high utilization on a revolving credit line like a credit card has a much bigger negative impact to your credit score than having an equivalent balance on installment.

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

#130

Post by batty_alex »

toss1 wrote: post #106
gruez wrote: post #89

Earlier quoted context omitted.

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.

People could also replace it all with a free library card. It isn't like television/video is some kind of necessity for life.

> People could also replace it all with a free library card

Going to the library takes a whole hell of a lot more time and work than turning on your TV.

Post reply on HN