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

141–150 of 329 posts

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

#141

Post by ianleeclark »

geggam wrote: post #127
ianleeclark wrote: post #108

Earlier quoted context omitted.

> 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 prog…

> What is stopping them from starting the business ?

Resources, obviously. If someone is screwed enough to have to reach for pay-day loans, that indicates they don't have enough resources. Likely their other credit lines are maxed out and their social support nets are either completely dissolved or just as illiquid as the prospective borrower is. So they can't invest any starting capital into the investment.

The second most important resource constraint they're going to be met with is time. Balancing commuting to work, keeping up the household, and full-time work of at least one job leaves you with an amount of time at the end of the day. Maybe they could invest that time into acquiring more marketable skills, but, hey, your lease is up in two months, and you just got the letter that inevitably tells you your rent is going up. Better start driving uber, trying to grab more hours, or doing whatever you need to to cover that new income gap that you'll be facing.

> What is the answer ?

There is no answer. You don't get conclusions when you're living in poverty in modern America. You just wake up every day and it's somehow worse than the day before.

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

#142

Post by asah »

batty_alex wrote: post #130
toss1 wrote: post #106

Earlier quoted context omitted.

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.

Borrow a stack of books/CDs/etc at once.

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

#143

Post by christophilus »

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…

This brings up a tangential question I've had lately.

When I played video games (especially RPGs), I always ended the game with a mountain of unused resources at my disposal. I rarely used items, cash, etc, unless the ROI was plainly evident. Many of my friends would just burn through cash / items as soon as they had them, and were often in a bind during tough battles / situations. I wonder if this followed us into life.

I tend to be a saver, and have always lived below my means. Many of my friends struggle to make ends meet, regardless of their salaries.

So, I'm curious. Do / did you play video games? If so, did you end the games with a huge pile of cash, or did you burn through it as you went?

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

#144

Post by chasd00 »

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?

because over 18 months there's 18 chances for something to go wrong, miss a payment, and then the trap snaps shut.

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

#145

Post by mumblemumble »

reilly3000 wrote: post #98
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...

I think the point was more that entertainment isn't really a necessity at all, even if its a 'good value'. If entertainment is in fact a necessity, most public libraries offer an immense amount of choices of physical and digital media available for free.

Nah, entertainment is a necessity, but that doesn't necessarily mean that any given choice of entertainment is a cost-effective choice of entertainment.

Just focusing on TV, for starters there's free TV over the air. There's YouTube and Amazon Prime Video and Netflix and CuriosityStream and Hulu and whatever your local state-supported TV network is putting online for free, there's DVDs from your public library, etc. etc. No, these options won't let you catch the latest Game of Thrones episode as soon as it airs, but they'll keep you entertained.

If you really want to get nitty-gritty about it, there is at least an interesting thought experiment you can run where someone who's both living paycheck to paycheck and paying for a sizable cable TV package has, intentionally or not, chosen, say, ESPN over financial solvency. Because that cable TV bill could be converted into a steadily growing rainy day fund.

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

#146

Post by logicchains »

theseadroid wrote: post #34
geggam wrote: post #9

Earlier quoted context omitted.

Disagree, You make the choices for life. Accept personal responsibility.

Just like the rich didn't get rich entirely because of their own abilities, poor people didn't get poor because they chose to. Placing the poor people in an environment where there are better education, better healthcare and better career opportunities always results in better financial decision making. So the society bears most if not all responsibilities. How can we eliminate poverty if it's entirely personal respo…

>Like slavery and apartheid, poverty is not natural.

This is absurd. Man in nature has no house, no car, no money, no tools, no storehouse, he can eat only what he can catch, kill or forage for. Everything we have in civilisation was built by people working hard to escape the poverty and brutality of nature.

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

#147

Post by blhack »

ianleeclark wrote: post #114
blhack wrote: post #104

Earlier quoted context omitted.

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?

https://en.wikipedia.org/wiki/Second_Bill_of_Rights

These ideas aren’t new. The idea of taxing the wealth even more is ALSO not new, and we already have tried it and had it fail. (France has tried this, as well as other European countries, with usually disastrous results).

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

#148

Post by wefarrell »

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.

The card is still under your name, the application will pull your credit report, and you're personally liable for the debt.

However most major banks (with some exceptions) do not report business cards to the credit bureaus unless you're in default, so it's possible to carry large balances without any impact to your credit.

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

#149

Post by chasd00 »

ac29 wrote: post #105
maxerickson wrote: post #18

Earlier quoted context omitted.

They simply don't qualify. Would you even consider a $3,000 loan at 25%? That's what's going on with these companies.

25% would be a relative bargain - that's better than some people's credit card rates. The screenshot in the article shows a range of 60-225% APR.

Well keep in mind, to a cash strapped individual that "minimum required payment" line is very attractive. a $3k loan can turn into a decade of "minimum required payments" that sum to well over $3k without even touching the principle owed.

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

#150

Post by isoskeles »

bryanlarsen wrote: post #71
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…

> $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...

It only counts as cheap if the value of those 4 hours/day of sedentary activity is greater than $4. Many would argue that it is not. But I understand you're saying that relative to other forms of entertainment it's "cheap", I'm just questioning the price relative to the value of the product itself.

Also, I know a lot of people argue that watching TV can maybe relieve stress in some way, or allow them to "wind down" after a "long day" at "work", but I'm not sure you need to wind down for four hours (not saying you are saying that).

Post reply on HN