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

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

#151

Post by kovacs » Tue, Oct 29, 2019, 5:15 PM UTC

mindslight wrote: post #16

I'm shocked that an economy based on the median person being in debt is finding new ways to get debt into everybody's hands. This topic is ultimately just a symptom. Focus on the larger economic design (eg rent treadmill) that precludes most everyone from saving a positive amount of wealth, rather than their needing to take on debt for emergencies.

Exactly. Sure, some of the customers of these products are simply mismanaging their finances, a great deal of them are simply not getting enough value for their labor. How do we get to a form of capitalism that works for all people? Not an easy answer for sure.

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

#152

Post by c0nducktr » Tue, Oct 29, 2019, 5:15 PM UTC

geggam wrote: post #30

ceejayoz wrote: post #23

Earlier quoted context omitted.

How does your "functioning society" handle the disabled? Into the Soylent Green factory with them?

Their family has that responsibility. I dont mind society creating allowances but the US has went too far and created barriers to small businesses with all of the disability requirements. I have many friends with small businesses that would like to start their own shop but the toilet requirement alone is almost 100k in up front cost. Ridiculous.

Not everyone has a family to fall back on.

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

#153

Post by munchbunny » Tue, Oct 29, 2019, 5:16 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…

While I agree with your point around how loan programs work with the poorer parts of our population, the headline explicitly states:

America’s Middle Class Is Addicted to a New Kind of Credit

I think in the case of the middle class, it's not really about survival, it's about living below/at/beyond your means, and whether these loans are doing too good a job of masking the real costs.

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

#154

Post by mumblemumble » Tue, Oct 29, 2019, 5:16 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.

It is generous; I think that's about in line with median personal income in the US.

If a person can't make ends meet on that kind of money in Fremont, that probably says more about Fremont than it does about anything else.

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

#155

Post by kart23 » Tue, Oct 29, 2019, 5:16 PM UTC

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…

Theres literally no education about personal finance in high school. And I went to a fancy high school, graduated in 2018. College too. The only thing I've seen is the Wells Fargo booth at the yearly club fair trying to sign up new students for credit cards.

And we wonder why so many americans live in poverty. Yeah the system is far from perfect, but I think basic classes in high school would be a great start to the problem, and could change the issue of generational poverty.

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

#156

Post by C1sc0cat » Tue, Oct 29, 2019, 5:17 PM UTC

wefarrell wrote: post #65

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 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"

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

#157

Post by kart23 » Tue, Oct 29, 2019, 5:18 PM UTC

tempsy wrote: post #139

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.

A Khan academy for personal finance would be great. Investopedia is a cool resource, but for the financially illiterate, it's pretty tough to understand the wealth of knowledge there.

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

#158

Post by twic » Tue, Oct 29, 2019, 5:19 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).

Just utterly unable to process "reduce inequality" being "ridiculous, unactionable". blhack, google something called "left wing politics", it's something that's been around for a while, but evidently not everyone has heard of it.

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

#159

Post by [deleted] » Tue, Oct 29, 2019, 5:19 PM UTC

chasd00 wrote: post #135

entropicdrifter wrote: post #11

Earlier quoted context omitted.

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.

[deleted]

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

#160

Post by pkaye » Tue, Oct 29, 2019, 5:20 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.

I live in Fremont, CA. I think if you live in a nice 1-br apartment, it might take half your budget. But if you take a bigger place and roommates, it should be doable.