Online installment loans have taken the subprime market by storm • Hacker News Board

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

#131

Post by [deleted] » Tue, Oct 29, 2019, 4:59 PM UTC

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…

[deleted]

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

#132

Post by dv_dt » Tue, Oct 29, 2019, 5:00 PM UTC

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…

For people who must rely on these loans, the pay for this class of jobs are too low. Your financial picture I think is mostly a myth. There is this grey margin where the jobs pays enough for minimal living expenses, but not enough any sort of long term holding or advancement with regular variation of cars breaking down, or health issues, or funding further education, or a basic vacation which everyone deserves. Society can only decline long term when more and more jobs only pay in this twilight threshold.

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

#133

Post by awinder » Tue, Oct 29, 2019, 5:00 PM UTC

geggam wrote: post #79

awinder wrote: post #37

Earlier quoted context omitted.

I think most people are downvoting you for being an asshole. There’s a way to make your point without being so incendiary and callous. “We are not enemies, but friends. We must not be enemies. Though passion may have strained, it must not break our bonds of affection. The mystic chords of memory will swell when again touched, as surely they will be, by the better angels of our nature.”

I have very few friends. I have a discriminating taste aka standards. Something society has lost.

~whoosh~

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

#134

Post by batty_alex » Tue, Oct 29, 2019, 5:02 PM UTC

blhack wrote: post #59

philipov wrote: post #47

Earlier quoted context omitted.

> 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).

> I’m sorry but this is a ridiculous, unactionable answer that is functionally equivalent to “well we should make things better”.

Your argument is that no one should have a conversation unless they have an action plan.

> 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).

These are all solutions for companies to make money from problems that could be solved by government-provided healthcare, better public transit, and subsidized housing (not just projects).

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

#135

Post by chasd00 » Tue, Oct 29, 2019, 5:02 PM UTC

entropicdrifter wrote: post #11

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.

Except that student loans can't be abandoned even if you declare bankruptcy. That one little factor makes them some of the worst loans imaginable in terms of long-term prospects.

the tradeoff is insanely low interest rates. Without the federal backstop student loans would have the interest rates of credit cards because as soon as new graduates get into the workforce, can't find a job, they'll file for bankruptcy to get out of the loan. Managing that risk without a backstop means incredibly high interest rate to cover for the losses of loans lost in bankruptcy.

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

#136

Post by dazc » Tue, Oct 29, 2019, 5:03 PM UTC

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.

A friend of mine was hooked on subprime loans (from what we call a 'doorstep lender' in the UK). Not great sums in principal but leaving him always cash-poor and in need of another loan as he cleared the preceding one.

I explained to him about 0% credit cards and how, since he'd never defaulted on a loan, he would be certain to get one.

He used his new card to clear his existing debts and has been paying off the balance over the past 12 months (he has 18 months and could move to another 0% easily enough, if need be).

He really didn't believe a bank would give him so much free credit since nobody had ever told him so.

The good news is that he has now filed a complaint against the original lender and is likely to be refunded most of the interest paid over the years plus statutory interest of 8% p/a while he waits. It's going to be around £9,000

Why? Because he was unemployed all that time and they shouldn't have been lending to him.

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

#137

Post by xur17 » Tue, Oct 29, 2019, 5:04 PM UTC

MuffinFlavored wrote: post #97

wefarrell wrote: post #65

Earlier quoted context omitted.

I try to keep myself in as much 0% APR debt as possible, almost at 100K. It’s all on business cards that don’t report to credit bureaus so it doesn’t impact my credit utilization. Instead of balance transfers (which have a 3% fee and a low limit) I put my quarterly taxes on my CC, which you can pay for 1.8%.

Could you elaborate on this? If I started a business (LLC), I could open an AmEx card card under the business and have access to a 0% line of credit? That doesn't sound quite right. I'm surely missing something.

You can open business credit cards directly under your name, no LLC required.

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

#138

Post by twh270 » Tue, Oct 29, 2019, 5:04 PM UTC

dfcagency wrote: post #120

mumblemumble wrote: post #56

Earlier quoted context omitted.

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.

So, don't live in Fremont if you can't afford to live there. Or find a roommate(s), live with family.

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

#139

Post by tempsy » Tue, Oct 29, 2019, 5:05 PM UTC

Is there no money in financial education...? I feel like there's no controversy in suggesting that the state of personal finance in this country is a disaster, even for people who are highly educated (how many tech workers actually understand how their startup options work?)

I just wonder what a viable business model would be for quality personal financial education or resources.

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

#140

Post by coldcode » Tue, Oct 29, 2019, 5:07 PM UTC

Reedx wrote: post #58

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.

Hardly anyone learns finance in public schools today (not even in my time); its better to keep people ignorant than to teach them how taxes and interest and banking work so you can easily fool them into believing what you want them to believe and make do what you want them to do. Teaching financial literacy should start early and never let up.