thedragonmas
join:2007-12-28
Albany, GA
| [Rant] thinkcash, think loanshark.
have you seen those sickiningly cute comercials for thinkcash? ya know the ones that are all animated. i gave it a thought just for a seccond. but unlike some people i read the fine print.
quote:
The Annual Percentage Rate (APR) for a loan of $1000.00 is 219.4% with 30 bi-weekly payments of $92.53
so at the end of 30 payments you have paid a total of $2,775.90 or $1,775.90 in pure interest.
what i wonna know is how the hell this is even legal? |
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Rob
In Deo speramus, God Bless the USA
Premium
join:2001-08-25
Kendall, FL | Sadly, it is legal. Legal loan sharks. |
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BlitzenZeus
Burnt Out Cynic
Premium,MVM
join:2000-01-13
Beaverton, OR
 ·Verizon FIOS
 ·Verizon Online DSL
| reply to thedragonmas
There's always a sucker, but they are trying to make money from a week of interest, hoping the people default in the future.
Our state, and other states have effectively made it illegal to do many of these practices to the extent they were. They are not completely gone, they just had to change to different tactics, but the majority of these fly by night businesses went bust after they couldn't massively scam the customer like this.
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My hourly rates:
$25 per hour.
$35 per hour if you want to watch.
$45 per hour if you want to help.
$75 per hour if you tried to fix it, and failed.
$125 per hour if you called tech support, and didn't fix the issue while making things worse |
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the Grumble
Yep, I changed my name again -
join:2009-05-11 | reply to thedragonmas
Be late with a payment and the interest rates go to around 700% |
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Hollow
join:2009-06-12 | reply to thedragonmas
Have you ever seen the Payday loanshark rates? And millions of people with lousy credit use them all the time.  |
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thedragonmas
join:2007-12-28
Albany, GA
| said by Hollow  :Have you ever seen the Payday loanshark rates? And millions of people with lousy credit use them all the time. the sad part is, thats their target. think about it. one spot in the comercial is for a flat tire. now im not saying tires are cheap. but if you dont have the cash for a tire and you go this route. its gonna cost ya. |
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dvd536
as Mr. Pink as they come
Premium
join:2001-04-27
Phoenix, AZ
| reply to thedragonmas
said by thedragonmas :have you seen those sickiningly cute comercials for thinkcash? ya know the ones that are all animated. i gave it a thought just for a seccond. but unlike some people i read the fine print. quote:
The Annual Percentage Rate (APR) for a loan of $1000.00 is 219.4% with 30 bi-weekly payments of $92.53
so at the end of 30 payments you have paid a total of $2,775.90 or $1,775.90 in pure interest. what i wonna know is how the hell this is even legal? Theres one around here thats 912.5% and get this, their store is between a chase and bank of america.
rofl!
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When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee |
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BlitzenZeus
Burnt Out Cynic
Premium,MVM
join:2000-01-13
Beaverton, OR
·Verizon FIOS
·Verizon Online DSL
| Nothing like fleecing the people who need the most help...
The federal government needs to step in, and regulate this entire industry. Predatory lending created a recession, and I don't think that any of these companies deserved a bailout. At least you know these loan sharks won't get a bailout when they can't make their money back. They can't goto small claims court either as their rates are way above the approved interest rates, so they have to go the way of collection agencies, and stealing money from peoples checking accounts. If the people sue, which they likely don't have money to do they might be able to get the contracts nullified due to the interest rates.
--
My hourly rates:
$25 per hour.
$35 per hour if you want to watch.
$45 per hour if you want to help.
$75 per hour if you tried to fix it, and failed.
$125 per hour if you called tech support, and didn't fix the issue while making things worse |
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Mr Neutron
Hopped up on what you mopped up
Premium
join:2005-05-30
Gorham, ME
| said by BlitzenZeus :At least you know these loan sharks won't get a bailout when they can't make their money back. I think you might be missing the point here: these companies charge interest rates like that because they often don't get their money back. As in, little to none of it.
I agree that it's unfortunate that people are compelled to take these folks up on their offer to lend them money at outrageous interest rates. But the flip side is that, by and large, the people who use these kinds of services are also some of the worst default risks out there. Think about it: why else would you be willing to put up such sky-high interest rates? For the simple reason that you cannot hope to get money from anywhere else.
Poor loan risks often have that problem. Which is how the whole payday loan industry was created: we now have an entire class of people who cannot manage their personal finances worth a damn. When you have savings, you don't need things like payday loans. The fact that an entire industry now revolves around making loans to people with poor credit who lack the ability to think ahead and plan for contingencies like flat tires (or whatever) should tell you something.
I'm certainly with you on the bailout thing, though. If you want more of something, pay for it, and the fact that the government has now made it a policy to subsidize incompetence* has guaranteed we are going to get more of the same.
*Assuming it was, in fact, reckless incompetence rather than clever scheming, of course. There's evidence to support that it was the latter.
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We could use the £5,000 to buy a spoon. And then fill up with ice cream. |
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BlitzenZeus
Burnt Out Cynic
Premium,MVM
join:2000-01-13
Beaverton, OR
·Verizon FIOS
·Verizon Online DSL
| While there may be some people who try to scam them, or try to avoid paying, depending on your state they have many methods to collect if you have any property or accounts.
Loans like this are intended to create a cycle of debt. I knew someone who wasn't too bright, and they were not a friend so I really didn't go out of my way to explain it to them if they didn't understand subtle suggestion that it would cost them more in the end if they used those places. They didn't try to save their money to avoid having to go back to them to pay their rates again. So they pissed away more money every month just keeping it up this cycle of borrowing money until it got them into more trouble. They lost their car which might have been worth 2-3k at the most, but it was enough for the company to recover their loss even with the cost to take possession of the vehicle. If they had just broken the cycle by cutting back on unimportant things like their cigarettes they could have easily broken the cycle, and had that extra money per month while keeping their car.
--
My hourly rates:
$25 per hour.
$35 per hour if you want to watch.
$45 per hour if you want to help.
$75 per hour if you tried to fix it, and failed.
$125 per hour if you called tech support, and didn't fix the issue while making things worse |
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Mr Neutron
Hopped up on what you mopped up
Premium
join:2005-05-30
Gorham, ME
1 edit | said by BlitzenZeus :If they had just broken the cycle by cutting back on unimportant things like their cigarettes they could have easily broken the cycle, and had that extra money per month while keeping their car. Or, even better, had a savings account they could draw from to meet whatever emergency (it was an emergency, right?) prompted them to go to the payday loan folks in the first place.
The cigarette thing doesn't suprise me either. By that I mean that if your friend had cut back on things like cigs (or "must haves" like cable and/or a cel phone) he would have had money to set aside for savings so that he would never had needed to approach the payday loan folks. Instead, it sounds like he took the short-term view....and paid dearly for it.
Of course, these loan companies probably couldn't exist if their customers were capable of thinking beyond the short-term. These same folks are the ones who keep the credit card industry afloat, too, by thinking purely in the short-term.
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We could use the £5,000 to buy a spoon. And then fill up with ice cream. |
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Doctor Four
My other vehicle is a TARDIS
Premium
join:2000-09-05
Dallas, TX
·AT&T U-Verse
|  reply to thedragonmas
I saw one of those ads last night and had to wonder what the catch was. Then I saw the fine print about the $100+ bi-weekly payments that worked out to an APR of 288%.
They're just like all those payday loan/check cashing places that prey upon those least able to avoid such situations.
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"The trouble with computers, of course, is that they are very sophisticated idiots." - Doctor Who (from Robot)
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cowboyro
join:2000-10-11
Shelton, CT
·AT&T U-Verse
 ·Comcast
 ·Optimum Voice
1 edit | reply to thedragonmas
While the APR is very high, these loans are intended to be *short time loans*. Even at 0.6%/day it comes to $6/day, if you're desperate to have $1000 for 1 week then it's not that bad. And again, the default rates for these loans are extremely high, I'd say it's quite fair since people taking these loans are in most cases the ones who don't pay and nobody else is willing to take the risk with them. |
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jjoshua
Premium
join:2001-06-01
Scotch Plains, NJ
·Verizon FIOS
·Comcast
| reply to BlitzenZeus
said by BlitzenZeus :Nothing like fleecing the people who need the most help... The federal government needs to step in, and regulate this entire industry. Or the government should mandate that everyone maintain a $1000 savings account for (government approved) emergencies. |
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Mr Neutron
Hopped up on what you mopped up
Premium
join:2005-05-30
Gorham, ME
| said by jjoshua :said by BlitzenZeus :Nothing like fleecing the people who need the most help... The federal government needs to step in, and regulate this entire industry. Or the government should mandate that everyone maintain a $1000 savings account for (government approved) emergencies. Actually, this is what Social Security is, more or less: a government-mandated savings account for retirement.
The problem is that there is no actual money in the account. There is, rather, only a king-sized IOU, as politicians have a marked tendency to spend money as fast as they get it. Making Social Security what is known as an "unfunded liability" which, as any accountant will tell you, is not a good thing to have on your books.
I can only guess at the fun 'n games that would ensue if the Feds were to mandate that everyone maintain some minimum level of savings. You'd better believe that they would graciously "manage" it for us until we needed it (assuming they would even let us have access to it at that point). 
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We could use the £5,000 to buy a spoon. And then fill up with ice cream. |
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jjoshua
Premium
join:2001-06-01
Scotch Plains, NJ | That's why I laugh at everyone who thinks that the solution to every problem is MORE government regulation. |
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the Grumble
Yep, I changed my name again -
join:2009-05-11 | I like being told what to do, how to do it, and when to do it, then hand the government my paycheck for doing so.
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ElJay
join:2004-03-17
·Great Works Internet
| reply to thedragonmas
219% APR is actually on the cheaper end of the payday loan scenarios.
Heck, I'd be losing sleep if I had to get a cash advance on my credit card for 22% APR. Those who can afford it the least are getting loans that are costing 10-40 times that. I think some people are surprised when the rent comes due on the same day every month. |
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Mr Neutron
Hopped up on what you mopped up
Premium
join:2005-05-30
Gorham, ME
| said by ElJay :Heck, I'd be losing sleep if I had to get a cash advance on my credit card for 22% APR. Actually, with the economy still circling the toilet bowl, I'm pretty sure your card company would be losing sleep, too. 
Getting a cash advance from your CC can't be good sign. I wouldn't try that stunt right now unless I was tired of having the account and was too lazy to pick up the phone to call and close it.
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We could use the £5,000 to buy a spoon. And then fill up with ice cream. |
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RonS
Madm0nke
Premium
join:2000-06-19
Dayton, OH
| reply to thedragonmas
Still cheaper than bank over the limit fees.
Found that I made a mistake in my checkbook and was going to be over drawn. So I went and got a $100 payday loan. Their fee was $15 for every $100. The bank would have charged me $32 for every over drawn check.
Who is the bigger rip off artist?
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You cannot help men permanently by doing for them what they could and should do for themselves. |
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