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

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

#191

Post by sokamyung » Tue, Oct 29, 2019, 5:49 PM UTC

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 whole reply just oozes with paternalistic co-dependence. Do you realize that?

You seem to think you supremely know what is best for the poor. You seem to think you know that not pointing out foolishness to those being foolish is a good thing.

And you seem to think it is not only your duty, but also that you are one to impose what you believe if best for those who you think are poor.

Have you ever asked the poor whether they desire your benevolent meddling in their lives?

You are literally expressing concern for lenders who knowingly are either taking risks that they will have to bear the cost of, or they are collateralizing the risky loans on to others who should be sophisticated entities that should be evaluating the risk contained in the securities they will be acquiring.

You should be keeping your concern for other people's individual lives in you pants. But if you are going to have a concern, start having a valid and healthy concern with the systemic risk of these subprime loans being bundled and collateralized into people's retirement accounts and pension funds on fraudulent or negligent circumstances.

Because when it comes down to it; if you have known any of the types of people that take out these loans, they not only don't want you meddling in their lives, but they resent the notion of being denied something that is being dangled before their eyes when they can't realize the consequences of their action just mere minutes out. Reality is also that if you are concerned for the poor, your worries should not be directed towards the individuals that may have to suffer the consequences of their own actions (regardless of whether you like what they do with their lives or not), but you should be concerned with these subprime loans triggering systemic cascading failures throughout the whole system that will put people out of business, poor that did it to themselves and middle class who didn't alike.

If you want to become the savior of the poor, go ahead, put your own money and time in place to inform and educate them on their foolishness. They will appreciate it … surely.

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

#192

Post by andyjsong » Tue, Oct 29, 2019, 5:50 PM UTC

WhompingWindows wrote: post #165

Cd00d wrote: post #126

Earlier quoted context omitted.

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…

Whoa, they are buying purses and vacations on these loans? Can you characterize the loans for me -- how much, what interest rate, what % of defaults do you see? I'd be very interested in a detailed analysis, that sounds very important.

At least with the peloton purchase, it sounds like they are using Affirm. Generally if you have good credit, interest rate is zero. I've seen it on other high ticket items for sale online. In this case Affirm reduces the friction of buying higher priced products.

The phone I'm typing on now was financed through symphony credit. Zero interest, and 36 monthly installments. I'm sure there are penalties if I don't pay every month, but it's on auto pay.

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

#193

Post by ThrustVectoring » Tue, Oct 29, 2019, 5:50 PM UTC

logicchains wrote: post #171

christophilus wrote: post #143

Earlier quoted context omitted.

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 l…

There was a studying showing that the trait behind this tendency towards saving, the ability to delay gratification, is present relatively early in childhood, and has strong predictive effect on success in life: https://en.wikipedia.org/wiki/Delayed_gratification#The_Stan... . Perhaps this implies that no matter how rich society gets, there'll always be people who just burn though whatever they earn. This would parti…

The marshmallow experiment is less about whether children are able to delay gratification, and more about whether or not they trust adults to deliver on the promises they make.

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

#194

Post by [deleted] » Tue, Oct 29, 2019, 5:51 PM UTC

logicchains wrote: post #171

christophilus wrote: post #143

Earlier quoted context omitted.

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 l…

There was a studying showing that the trait behind this tendency towards saving, the ability to delay gratification, is present relatively early in childhood, and has strong predictive effect on success in life: https://en.wikipedia.org/wiki/Delayed_gratification#The_Stan... . Perhaps this implies that no matter how rich society gets, there'll always be people who just burn though whatever they earn. This would parti…

[deleted]

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

#195

Post by wefarrell » Tue, Oct 29, 2019, 5:53 PM UTC

C1sc0cat wrote: post #156

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%.

You have 100k in debt in your name wow as they say that's a "brave choice"

It's substantially less risky than having a mortgage on a home.

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

#196

Post by mieseratte » Tue, Oct 29, 2019, 5:53 PM UTC

sokamyung wrote: post #191

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 whole reply just oozes with paternalistic co-dependence. Do you realize that? You seem to think you supremely know what is best for the poor. You seem to think you know that not pointing out foolishness to those being foolish is a good thing. And you seem to think it is not only your duty, but also that you are one to impose what you believe if best for those who you think are poor. Have you ever asked the poor…

> Your whole reply just oozes with paternalistic co-dependence. Do you realize that?

As does yours. As if you know any more than anyone else.

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

#197

Post by vxNsr » Tue, Oct 29, 2019, 5:56 PM UTC

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 used those "loans" to avoid taking out college loans. I still have around 20k but between p2 and me I can move it every 15-18 months to a cc that doesn't even have the 3% fee without consequence. I know I'm not really their target market for this but I love it.

I'm banking (no pun intended) on a strong economy which makes banks happy to lend out free money. as soon as the economy sours I'm gonna be hard pressed to find anyone offering this. Truthfully I could pay it off now, but why should I?

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

#198

Post by sokamyung » Tue, Oct 29, 2019, 5:56 PM UTC

Cd00d wrote: post #126

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…

Is there any way of telling from your dataset whether those loans are taken out by people who are in the USA on a limited or illegal basis and just end up just ditching their debt when they head back home?

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

#199

Post by [deleted] » Tue, Oct 29, 2019, 5:58 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.

[deleted]

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

#200

Post by sokamyung » Tue, Oct 29, 2019, 5:59 PM UTC

xeromal wrote: post #185

davidhyde wrote: post #86

Earlier quoted context omitted.

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…

I grew up in North Georgia where the rural and ghetto areas are poor, not middle class, and everyone has a subprime loan. It usually goes like this: you run up your shitty interest rate credit cards on car repairs to get to work, you come across this refinance service that will pull your 3-5 1000$ credit cars into one payment and reduce what they're paying by 80-200$. They're excited and don't even notice that it's 2…

It sucks most because those poor rural and urban ghetto communities have been utterly plundered by illegal and legal immigration that has led the ruling aristocracy to plunder other countries of their skilled people with H1B visas instead of actually having to be competent governors of the country.

Immigration of any kind of any substantial number is a sign of utter failure in governance. The more you rely on immigration the more the government is a failure and was mismanaged.