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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

#291

Post by imtringued »

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...

Pretty much every free to play game is cheaper (however it is designed to drive you nuts and spend money on useless things).

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

#292

Post by imtringued »

snarf21 wrote: post #187
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 read a report recently that talked about payday loans. The issue is that the people who take them out are likely to default a lot so the rate has to be high. Most of these companies make almost no profit. Now, my first thought was good! They are so predatory. But what the report talked about was that in that case, these people still need the same amount of money and instead turn to loan sharks and organized crime w…

>The issue is that the people who take them out are likely to default a lot so the rate has to be high.

When you see a 100% interest rate loan (assuming no fees) then it basically means that banks lose 50% of the money they loan out and 50% of borrowers are paying their loan on time and have to cover the other 50% by paying twice as much.

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

#293

Post by CydeWeys »

geggam wrote: post #81
CydeWeys wrote: post #69

Earlier quoted context omitted.

They don't, though. Once someone turns 18 they are legally no one's responsibility but their own self's.

So you quit loving your mom and dad at 18 ? And Im callous ?

What does that have anything to do with what I said?

Your discussion here has been nongenuine and not helpful. Better if you just didn't comment at all.

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

#294

Post by lcall »

bcrosby95 wrote: post #239
lcall wrote: post #232

Earlier quoted context omitted.

Maybe instead of pointing out how foolish, we can positively encourage good behavior, and tell them "you can do it!", and be a true friend, encouraging them to manage finances better. For example, we should all have some emergency savings, then build our savings, and sacrifice conveniences or fun as needed to get out of debt. We would do well to create a culture of not being victimized or manipulated so much by adver…

If you make little enough and live in a major metro area its pretty easy to burn through any savings you have. I have several friends now in their 40s now that used to continually cycle the steps of: lost job -> spent savings -> debt -> got job -> payoff debt -> generate savings -> lost job -> ... At some point they just lost hope. I can't blame them for racking up debt if the system lets them continue. It sounds bet…

I am not selling anything (maybe some software someday, but that's a different topic). But I think about things like this a lot and have posted many thoughts, over time. I hope you don't mind but this is my best work in this area, so far, over some years.

(Truly, we do not need to be alone, or give up. I have been thru many things that ... leave me grateful now. So I hope this can be useful to someone....)

There are people who can help, with guidance, and in other ways. One list (many resources): http://lukecall.net/e-9223372036854601245.html . Another (having the Church as help in life): http://lukecall.net/e-9223372036854581807.html . Another: extended family. Another (general life lessons and resources found, including overcoming addictions, but much more): http://lukecall.net/e-9223372036854592298.html . Another (pray): http://lukecall.net/e-9223372036854585359.html . I have learned by long and much-repeated personal experience (the easy way and the hard way) that prayer makes a huge difference, if we are willing to do our part and be obedient to God when we know what we should be doing: http://lukecall.net/e-9223372036854580889.html . And how I learned that: http://lukecall.net/e-9223372036854587400.html . More resources (better than the above stuff): https://providentliving.churchofjesuschrist.org/?lang=eng

Wishing the best for everyone in tough circumstances (which seems to be all of us at one time or another)!

(edits: minor fixes, add the providentliving.org url.)

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

#295

Post by jjeaff »

lcall wrote: post #235
jjeaff wrote: post #234

Earlier quoted context omitted.

I agree we should be teaching more financial literacy, but I think this, and most of these financial literacy courses, gloss over the realities of poverty. An emergency fund is very important, but most people in poverty live in the red perpetually. There is never extra cash to save up. Any extra money is swiftly gobbled up by debtors who wait indefinitely for any money to show. Which is actually one reason you will s…

I think there are ways out, that depend on desire and belief that it can be done. Knowing one's own worth (infinite, really) is key, I think. The links I mentioned link to other things that can help. Here is another: https://providentliving.churchofjesuschrist.org/development-... ...off that main "provident living" page: https://providentliving.churchofjesuschrist.org/?lang=eng And there is more at my web site. I hav…

Interesting, as a member myself, I hadn't heard of the immigrant services program.

And I agree, the poverty cycle is of course not inescapable. But boy is it a lot harder than I think those of us who have always been more fortunate think it is.

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

#296

Post by lcall »

jjeaff wrote: post #295
lcall wrote: post #235

Earlier quoted context omitted.

I think there are ways out, that depend on desire and belief that it can be done. Knowing one's own worth (infinite, really) is key, I think. The links I mentioned link to other things that can help. Here is another: https://providentliving.churchofjesuschrist.org/development-... ...off that main "provident living" page: https://providentliving.churchofjesuschrist.org/?lang=eng And there is more at my web site. I hav…

Interesting, as a member myself, I hadn't heard of the immigrant services program. And I agree, the poverty cycle is of course not inescapable. But boy is it a lot harder than I think those of us who have always been more fortunate think it is.

Just to confirm I am not making things from a standpoint of $ given to us: My grandparents were either both legally blind (one side, very poor and kids stressed out), or rather poor (especially compared to most americans today) farmers in Mexico with 13 children. The "privilege" I have enjoyed (other than skin/benefit of the doubt?--unsure since I probably don't fully understand that from everyone else's perspective: just acknowledging I don't know everything) is encouragement to work hard and that I could do it, during my whole upbringing. My dad was a school teacher (and part-time painter and newspaper deliverer) and my mom a full-time mom (stressful, but it sure helped us as kids to feel secure). Things were hard, but on we go, and I am grateful. Maybe rambling now.

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

#297

Post by winfred »

kds3 wrote: post #275
colechristensen wrote: post #270

Earlier quoted context omitted.

If, in aggregate, people are saving more than they're earning, your economy is necessarily shrinking on a per-capita basis (or your central bank is injecting money into the economy and your "savings" is being inflated away). If you're not investing in some creative act, you're taking capital away from everybody else.

> or your central bank is injecting money into the economy and your "savings" is being inflated away This classical macroeconomic principle does not work any more [0]. Today inflation is not directly related to central bank actions. [0] https://www.economist.com/special-report/2019/10/10/inflatio...

If over time, you change the way you measure inflation[0], to manipulate government bond rates and Social Security payouts[1], then it's not surprising you end up with a world where inflation is not directly related to central bank actions.[2]

[0]http://www.shadowstats.com/alternate_data/inflation-charts

[1]https://www.businessinsider.com/if-people-knew-the-actual-in...

[2]https://www.investopedia.com/articles/07/consumerpriceindex....

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

#298

Post by sem000 »

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.

There is regulation in many states.

The problem is the default rate.

Example: An investor issues loans for $100k at $1k each. He charges the legal 30% interest to make $30k profit / return on his money. However, 30-40% of the borrowers default and these are unsecured loans. He makes 0% return. He stops offering these loans and now these people don’t have the access to these credit facilities.

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

#299

Post by toast0 »

novok wrote: post #256
jcater wrote: post #218

Earlier quoted context omitted.

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.

When the offer is $X now or $X/36 for 36 months, it's clear the seller is paying the financier, but that doesn't mean the seller will offer a discount for current payment.

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

#300

Post by toss1 »

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.

Not if you count the 30-40% of the time you waste watching commercials, vs one trip to the library for a stack of books.
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