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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

#271

Post by Aperocky »

colechristensen wrote: post #270
Aperocky wrote: post #263

Earlier quoted context omitted.

The culture is really different, and frankly, it's not a clear cut 'this is simply better' thing. China had trouble expanding their domestic market because people just save the money they earned instead of spending it on things.

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.

Exactly, as much as loans and savings go, they don't physically alter the currently available resources to be consumed, which really has nothing to do with money at all. A society can't just collectively save most of its income for it to be magically available at a later date. It's just suffering deflation while exporting inflation into the future. It's some sort of prisoner's dillema that high-saving countries usually run into.

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

#272

Post by [deleted] »

kortilla wrote: post #180
ianleeclark wrote: post #167

Earlier quoted context omitted.

Ahh, okay. I guess we'll just let people die in the streets then.

People aren’t dying in the streets because Bezos has 100 billion. Pointing to rich people is just a distraction for people who can’t do math. Even if you could magically trap all of them in the US and wealth tax them away, it’s a meaningless drop in the bucket. Seize all of the money from everyone with 50 million+ in the US and you don’t even have enough to pay for Medicare for all.

[deleted]

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

#273

Post by fzeroracer »

geggam wrote: post #226
ceejayoz wrote: post #212

Earlier quoted context omitted.

You're getting it backwards. Your parents are only legally required to care for you up until your 18th birthday. Their function as a safety net may end at that moment. Plenty of folks have shitty, abusive, or neglectful parents who wash their hands of their children at the first opportunity.

You have it backwards. The parents have children to continue their genetics / DNA. IF the parents don't care enough to continue their DNA that is called evolution. Then it's up to you the individual to succeed. No one else.

Ah, so you're essentially arguing that people with disability essentially deserve to die if their family can't or won't take care of them.

That's a wonderful way to look at running a society. There's really not much else to say other than it's an incredibly warped viewpoint.

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

#274

Post by MadWombat »

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 am not the OP, but I do play games. And I tend to hoard the hell out of everything I find in the game (especially in RPGs). And I do tend to have a lot of unused inventory by the end of the game.

At the same time, I don't do well with money, I eat out too much, drink too much, make impulsive purchases (mostly gifts and hobby related things, but still) and generally do not watch my budget very carefully.

I don't think video game experience translates very well into real life. In a game, going through tough fights without using any healing or other expendables feels like an extra challenge, going through life without going out for beers or a diner date or without wasting a couple of hundred bucks on a fancy VST plugin or a cute RC toy for some friend's kid does not feel that way.

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

#275

Post by kds3 »

colechristensen wrote: post #270
Aperocky wrote: post #263

Earlier quoted context omitted.

The culture is really different, and frankly, it's not a clear cut 'this is simply better' thing. China had trouble expanding their domestic market because people just save the money they earned instead of spending it on things.

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...

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

#276

Post by cascom »

bcheung wrote: post #168
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…

For me, I had a business partner that screwed me over and left me with a lot of credit card debt. I took out an installment loan of $20K at 6.5% interest to pay down the cards. It's saved me a lot of money in interest and has been of great value to me. It also caused my credit score to shoot up over 100 points because I didn't have such high balances on my cards anymore. I would hardly consider it predatory. I for on…

I don't think the article is referencing installment loans at 6.5%

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

#277

Post by alecco »

majos wrote: post #76

Not an expert at all in this area, but if people are interested in statistics for people's financial habits, the Federal Reserve's most recent "Report on the Economic Well-Being of U.S. Households" [1] is useful. It's a survey of about 10,000 people and, as far as I can tell, is the source for many claims like "40% of American adults cannot meet an unexpected $400 expense". That statistic in particular is consistent…

That’s valid, but financial education is quite bad in US. It shocks the mentality of most people, in particular low income. Many buy $4 coffee, fancy shoes, big TVs, yet they complain about not being able to pay the credit cards. Sorry, I’m foreign, but that’s what most other visitors I’ve met think.

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

#278

Post by colechristensen »

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...

Meh, I think it has more to do with central bank actions being so far removed from buying eggs at the grocery store that the macroeconomic effects are just not very tightly coupled with specific actions. People aren't making different decisions w.r.t. the cost of capital and banks giving loans aren't giving riskier loans when interest rates are lower - the risk and the interest have little coupling at all. So central bank actions are only having effects inside the very navel-gazing financial industry that is moreso playing its own game than interacting with the outside world.

That is, central bank actions' effects are being hidden by complexity that will take time to shake out. Interest rates and bailouts and the like are only affecting a certain tier of society and it will take a while for those waves to spread to the rest of us.

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

#279

Post by alecco »

streblo wrote: post #99
notus wrote: post #2

I feel like the government should be offering some type of non predatory debt relief comparable to this. This service is only a detriment to the borrower due to the crazy high interest rates, but I think the government could break even with much more reasonable interest rates, consumers would be better off financially, and the predatory industries would disappear since they can't compete.

> I feel like the government should be offering some type of non predatory debt relief comparable to this. Just want to point out the fact that US government-backed student loans are non-dischargeable through bankruptcy. You will have that albatross around your neck until you pay it off or die. This is the ultimate predatory loan and it's provided by the government.

Good luck giving credit to students without any backing.

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

#280

Post by cascom »

tempsy wrote: post #118
rootusrootus wrote: post #45

Earlier quoted context omitted.

Be careful with balance transfers. At 18 months, a 3% fee is like a 3.75% APR. If the balance transfer is only 12 months, it's about 5.5%. Still a lot better than a subprime installment loan, but a 3% fee is not a 3% APR.

Not sure what you mean by "be careful." That is an extremely cheap loan by any measure.

Not if they were only borrowing for 1-month - then the annual rate would be closer to 43%
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