Payday loans

[Spectral]

Given the way markets work, if there was great money to be made lending to these people at lower rates, someone would do it. There's nothing stopping them other than the reality that it's not profitable to lend at significantly lower rates. The reason for this is pretty obvious - the kind of people that take payday loans are the kind of people that pay loans back at low rates, making even small loans to them very risky bets. Here's the Motley Fool explaining credit scores a bit; the relevant punch line figure is this one:



Would you lend to someone that has roughly a coin flip chance of not paying back one or more of their loans? I wouldn't, which would preclude lending to anyone with a score under 600. How many people at payday loan places do you figure have credit scores under 600?

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Then, rather than saying that these predatory practices should be outlawed, scumbags just say "It's poor people's fault for falling for it."

There's at least one additional possibility - I find payday loans unsavory, but I find the alternative of banning high lending rates to be even worse. As I indicated above, the risk involved in lending to people in these groups is really high, yet these people do need to get short-term loans. I guess you could argue that there should be a government subsidized short-term lending and that the government should just eat the costs of people not paying these back, but the moral hazard there would be substantial.

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If they're willing to sign the contract for the loan then they're fucking themselves over. The terms of the loan are very boldy stated on the paperwork. It's not the business's fault that someone fucked up with their finances.

Most people with this poor of finances don't have the ability to understand and process what the interest on these are. There's no plausible way to explain it well enough for them to truly understand the implications of the numbers the same way that someone better with numbers would. Saying that they saw the terms really isn't all that relevant.

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Oh I can get a credit card.

$35 a year payment
22% APR
And I have to deposit money in there for the credit line.


So I'll be paying $35 for a glorified debit card.

You should probably still do this. Obviously I'm not privy to all of your finances, but it would generally be good advice to consider that $35/year fee a charge for building your credit score. While secured credit-cards are pretty low utility in and of themselves, you need to start somewhere and this can be that starting point. The APR shouldn't be relevant - live within your means and pay it off every month.

[RickJamesLich]

I used pay day loans when I got my first apartment for a few months to pretty much just be able to handle all of the bills I had while still being able to eat. They come in handy for the people that really need it. As for the fews, who cares? I knew what I signed up for when I got into it, so does everyone else. If you're going to run a business where you do this type of thing, of course you will want to set up this type of system so that your business can cover it's cost.... this is just simple economics. If the fee's were too high, people wouldn't go to them, and they would go out of business.

[Tennis]

Excessive leverage and the dot com crash.

Why didn't they save more and live a more humble lifestyle then? Why live on the edge?

[Cthulhu 2020]

Do all not ideal products and services should be outlawed to stop people from using them. Alcohol. Etc

And yet alcohol is heavily regulated.

Payday loans are straight up predatory and exploitative. We have no long standing history with payday loans, and they are not used in any positive way whatsoever. They always end up costing the poor person even more.

They should be banned because they have zero positive influence on society, and no, other things shouldn't be banned because they are not the same thing. Stop being a terrible person who defends predatory practices just because "some people are stupid and deserve to be scammed".

[Gamdwelf]

And yet alcohol is heavily regulated.

Payday loans are straight up predatory and exploitative. We have no long standing history with payday loans, and they are not used in any positive way whatsoever. They always end up costing the poor person even more.

They should be banned because they have zero positive influence on society, and no, other things shouldn't be banned because they are not the same thing. Stop being a terrible person who defends predatory practices just because "some people are stupid and deserve to be scammed".

I never said they deserve to be scanned. I'm just saying it's their body their choice if they want to be scammed.

[Septik]

i had a neighbour who would borrow from 3-4 of these places at a time, every month. when her disability cheque came in she'd go from one store to the other and "pay off" the current loan then take out a new loan at the same time. so she'd be down the 20$ per hundred or w/e her repayment was, but she would at least still have some money in her hand when she was all done shuffling them around. not sure how/if she was ever able to get out from under that mess, but she herself was not far off from being an actual pile of shit and is probably still doing it.

[Asiwassaying]

I am not the one in the end trying to prevent an adult from making a personal decision. You must be a liberal as you seem to believe you know what's best for everyone else. Liberals/democrats love nothing more than telling other people what's best for them and what they do and do not need.

I will choose freedom. Who am I to claim that using a payday loan center is a bad decision for every single person? I cant, and neither should you.

I'm independent but lean right.

Please stop with this "I don't agree with you so you must be politically affilated with the side I appose" garbage. Politics has no place in this topic. And some folks don't care about it.

[Cthulhu 2020]

I never said they deserve to be scanned. I'm just saying it's their body their choice if they want to be scammed.

So you think these people want to be scammed? You've outed yourself as incredibly naive in the past, but this thread just takes the cake.

[Asiwassaying]

At spectral.

I have raised my credit score about 100 points in the last year without paying a fee to use a "debit" card. I'm not gonna pay a company to borrow my own money with an interest rate attached.

If I had the cash to give away money like that, I wouldn't have needed a payday loan.

To reiterate , my credit went from poor to fair and I'm nearing the "good" mark. Just gotta make sure your creditors report your payments and not just when you miss one.

[Paranoid Android]

So you think these people want to be scammed? You've outed yourself as incredibly naive in the past, but this thread just takes the cake.

I mean google definition of scam is hard.

Simple Definition of scam
: a dishonest way to make money by deceiving people

Source: Merriam-Webster's Learner's Dictionary

Full Definition of scam
: a fraudulent or deceptive act or operation <an i

[Tennis]

But why. Why throw your money away with ridiculous amounts of interest ??

i had a neighbour who would borrow from 3-4 of these places at a time, every month. when her disability cheque came in she'd go from one store to the other and "pay off" the current loan then take out a new loan at the same time. so she'd be down the 20$ per hundred or w/e her repayment was, but she would at least still have some money in her hand when she was all done shuffling them around. not sure how/if she was ever able to get out from under that mess, but she herself was not far off from being an actual pile of shit and is probably still doing it.

[Septik]

But why. Why throw your money away with ridiculous amounts of interest ??

uneducated, poor, desperate, sounds like a good idea at the time?

i been there a few times in the past and even took one of these loans. i made sure i was able to get out of it when it was due (not having to re-borrow to get by) so it worked out good for me in a pinch but probably never again id sooner beg my sister or other relative for a loan.

[NineSpine]

But why. Why throw your money away with ridiculous amounts of interest ??

If you've never been poor, it can be hard to imagine being in a situation where you've run out of food and don't get paid for three days.

[ezgeze]

I'm independent but lean right.

Please stop with this "I don't agree with you so you must be politically affilated with the side I appose" garbage. Politics has no place in this topic. And some folks don't care about it.

and yet the stance you take is one against personal freedom. Just because you claim to be center right doesn't make it so when positions you take are contradictory to your affiliation. My statement stands as accurate.

[TirielWoW]

Payday loans are terrible, terrible places. I work for a bank, and sometimes people will come in and deposit checks that are obviously from one of these places. If I catch it, I'll sometimes talk to them and try to get them to see a banker to see if we can help them instead, because at least our rates are better and the payments much more reasonable.

[NineSpine]

and yet the stance you take is one against personal freedom. Just because you claim to be center right doesn't make it so when positions you take are contradictory to your affiliation. My statement stands as accurate.

You confuse "personal freedom" and "being forced to live in the type of economy I prefer". It is not freedom to be born into poverty and then have to scrape by to appease an upper class that steals from you constantly, whether explicitly or through scams and fraud.

[Gamdwelf]

And yet alcohol is heavily regulated.

Payday loans are straight up predatory and exploitative. We have no long standing history with payday loans, and they are not used in any positive way whatsoever. They always end up costing the poor person even more.

They should be banned because they have zero positive influence on society, and no, other things shouldn't be banned because they are not the same thing. Stop being a terrible person who defends predatory practices just because "some people are stupid and deserve to be scammed".

Their terms are clearly spelled out, if people then still choose to use them that is their choice, same with cigs and alcohol.

[NineSpine]

Their terms are clearly spelled out, if people then still choose to use them that is their choice, same with cigs and alcohol.

The fact that something is a choice doesn't mean it isn't socially destructive. Our society puts a lot of time and energy, and money, into regulating cigs and alcohol, even discouraging their use and punishing distributors for misleading people.

[Gamdwelf]

The fact that something is a choice doesn't mean it isn't socially destructive. Our society puts a lot of time and energy, and money, into regulating cigs and alcohol, even discouraging their use and punishing distributors for misleading people.

But its still an option, people destroy their lives and others every day with alcohol, and other drugs, legal or not.

[NineSpine]

But its still an option, people destroy their lives and others every day with alcohol, and other drugs, legal or not.

This often isn't an option though. That's the problem. People need these loans to get by.