You mean to say they get it wrong, according to your view, since we've just agreed there's no objective right and wrong in these matters.
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Seems odd this is legal and this blantant..
- Thread starter JJacksET4
- Start date
Quote from hippie:
Payday Loans do not have high enough risk to justtfy this kind of rates. After all, they know you have a paycheck.
This sort of loans was what got many young military enlistees in such huge debt that the US Navy could not find enough sailors who could get the Security Clearance needed to work on submarines due to their debt. Very sad for America.
This is not correct at all. They do not have a paycheck. They have a borrower's personal check that is usually postdated.
The typical charge off rate for these loans are 25% with the majority of the loans typically only a couple of hundred of dollars. The CEO of a payday lender was quoted as saying that they don't take any of these claims to court because its not worth their time.
I would definitely say the rates they are charging to the type of people they are lending too is inline with the amount of risk they are taking.
Quote from itsame:
This is not correct at all. They do not have a paycheck. They have a borrower's personal check that is usually postdated.
The typical charge off rate for these loans are 25% with the majority of the loans typically only a couple of hundred of dollars. The CEO of a payday lender was quoted as saying that they don't take any of these claims to court because its not worth their time.
I would definitely say the rates they are charging to the type of people they are lending too is inline with the amount of risk they are taking.
What do you mean by "the type of people they are lending to"? Many of the navy guys here use these loans. Are you saying that our army/navy boys are not very responsible?
Quote from itsame:
I would definitely say the rates they are charging to the type of people they are lending too is inline with the amount of risk they are taking.
I think beyond the risk pricing you also have to consider that the lenders fixed costs are built into the interest rate on each loan. With payday loans the loan size is small and term is short, so a moderate dollar amount turns into a large %.
I agree that it sucks to be in a position to need to borrow this way, but I don't think payday lenders are getting rich. I bet if you make a spreadsheet with some ballpark numbers (rent the store, pay 5 employees, $300 dollar loans for 2 weeks, etc.) you would find this is not a viable business at "reasonable" interest rates. If it were I think competition would drive the rates down. I don't believe this in general but this is not a business that is that hard to get into.
Hippie means the payday loan company knows the borrower has a job. So, the borrower will receive their paycheck in time and will be in a position to pay out the loan.
Quote from bullmarket79:
The government lends money to the states,,we should charge the state that needs fund the maximum interest rate that they allow corporations to charge that states citizens,,the USA needs the money and most states are not good credit risk.
Simply treat the states as they treat there citizens. If the good people of tennessee require funds from the feds then they get charged 300% interest,,as they allow there citizens to be charged. They could simply refuse to take money from the feds or tax themselves to pay for there own needs without bothering the rest of America to help fund them through there own incompetence.
why can't the states print their own money. if you want a free market states should be free to use their own money. this seems like a strong arm monopoly.