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Online installment loans have taken the subprime market by storm

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

#251

Post by rootusrootus »

basch wrote: post #248
p1mrx wrote: post #211

Earlier quoted context omitted.

I don't think there are any savings accounts with >= 3% APY right now. How could it ever be profitable to borrow money at a higher interest rate than you earn by holding it? Or, if "somewhere high interest" refers to the stock market, then you risk not being able to pay back the loan in a year.

A balance transfer is a one time fee, not compounded monthly or daily. You pay 3% up front, and then theres no benefit to paying the loan off early, except for holding a lower credit card balance. What I am saying is, is that IF you are taking a balance transfer, to accurately compare it to a traditional, monthly compounded loan, you need to account for the minimum payment differences (the balance transfer will be 5x…

This is why I said "be careful" ;-). Someone who thinks that a balance transfer offer is easy math may not be making the best financial choice. As you point out, managed carefully, that can be mitigated.

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

#252

Post by SkyBelow »

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.

Most hobbies have a cost and time length of enjoyment and thus you can determine how much you are spending per hour of enjoyment.

Movies is like $25 an hour, though skipping concessions and going to a cheaper theater can bring it down to under $10 an hour.

A short video game (assuming full price release day) is like $7 an hour. (Cost is higher if you play games less because the upfront cost of the system is split over fewer games).

A long video game is goes from $2 an hour to $.50 an hour, and can go much cheaper for games you enjoy for extremely long times.

Books for me are around $2 to $.50 an hour ($20 book that last 10 hours to a $10 book that lasts as long). Libraries make all of this much much cheaper if you have one.

I actually read a lot of web novels/fan fiction which are generally free and thus my only cost is for the internet access that I'm paying for anyways.

Sports can be a lot harder to measure because there is a large variance in the costs depending on numerous factors, but I would assume they aren't that much cheaper (though generally much healthier for you).

I find art, especially for anything that is above crayola level brand, is quite a bit more expensive. So for kids it is cheap, but for adults who spend any serious amount of time in it, the costs go up pretty fast.

So in comparison, $1 an hour for TV isn't bad, but it is filled with ads. So many ads I personally refrain from TV.

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

#253

Post by SkyBelow »

tboughen wrote: post #122
reverend_gonzo wrote: post #100

Earlier quoted context omitted.

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 a…

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

Even the library has a cost, but it is generally much much lower if you have good access to a library.

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

#254

Post by blackflame »

manthedudeguy wrote: post #173
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…

Something to always consider - all of that unused cash at the end is something you didn't do during the game (your life) that you probably could have benefited from.

Like Frank Capra's 1938 film, "You can't take it with you"

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

#255

Post by [deleted] »

mikestew wrote: post #88
Reedx wrote: post #58

Earlier quoted context omitted.

> 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.

Do we not do this anymore? When I was in high school almost 40 years ago, there was a class/classes that taught things like balancing a checkbook (go ask your parents), keeping a household budget, how interest works, and the like. I didn't take that class (kinda wished I had), so I don't know what it was called. If we don't, we should. Especially now that we're all responsible for our own retirement. With nearly ever…

[deleted]

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

#256

Post by novok »

jcater wrote: post #218
llamataboot wrote: post #202

Earlier quoted context omitted.

I don't know - I have seen lots of zero interest offers - but never from Affirm. I have a 750+ credit score and last time I looked at Affirm for something (a glowforge I think), interest rates offered were above 21%!

They do, as I bought a Peloton using Affirm. I was ready to pay cash, but they offered to do an interest free, no fee loan thru Affirm and split it across a couple of years. So I did it, because why not? I’m guessing this was probably an arrangement between Peloton and Affirm to where the former paid some fee to the latter, and all of that is absorbed as marketing overhead just to get more people buying bikes.

That you pay for via inflated prices and fat profit margins.

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

#257

Post by magashna »

christophilus wrote: post #143
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…

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…

I've had to force myself to use that ammo/elixir/etc. because I'd do the same. Playing something like DOOM (2016) where you're constantly swapping between weapons due to ammo running out helped. Or play everything on hard

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

#258

Post by colechristensen »

asdfman123 wrote: post #249
colechristensen wrote: post #245

Earlier quoted context omitted.

80% of people live "paycheck to paycheck" whatever exactly that means. (count me among them) Very few of them actually need to. It is possible at any income level to spend less money than you make. People don't tend to make those choices though and unfortunately prices reflect this - for a lot of things, especially housing, prices rise to whatever people will pay – if everyone is willing to pay so much for housing th…

Thank you, people don't acknowledge that simple point of logic often enough -- debt is a mindset. Really what we need is a culture of saving, but a part of me feels that many people in our culture find that extremely difficult because billions of dollars are spend every year on propaganda designed to try to get us to spend more (read: advertising).

For an economy, too much saving is as much a problem as too much debt. We're all just paying each other to do things and acquiring capital just to have it past the point where you need it kills jobs and concentrates wealth away from people less fortunate.

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

#259

Post by xwolfi »

colechristensen wrote: post #245
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…

80% of people live "paycheck to paycheck" whatever exactly that means. (count me among them) Very few of them actually need to. It is possible at any income level to spend less money than you make. People don't tend to make those choices though and unfortunately prices reflect this - for a lot of things, especially housing, prices rise to whatever people will pay – if everyone is willing to pay so much for housing th…

This is a very american thing. I'm french and live in China, what you're describing is really foreign to me.

I'd say "most people" save a lot for retirement and their first house buy, "most people" live way below their salary max, "most people" would slap you for considering a consumer loan.

What happened to you guys to go so deep in the hellhole to not even see it's madness to live that way...

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

#260

Post by rohit2412 »

streblo wrote: post #93
Litmus2336 wrote: post #60

Earlier quoted context omitted.

Because, theoretically, these companies would not be profitable if their interest rates were regulated, and therefore nobody would offer loans. But I don't have statistics on default rate or anything of that sort.

These companies wouldn't be profitable, but other companies that are founded post-regulation could be. Companies have a remarkable ability to mold their business models around regulation.

It will be ugly, just like the venezuelan government setting prices of food items led to farmers abandoning agriculture.
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