Curious say someone lends you 5k, so $7500 in return, is that nuts?
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crazy from who's point of view? the one lending or the lender?
as far as I know payday loan "scams" charge a lot higher interest
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It's crazy to think someone that needs $5k now can pay $7,500 back in a short amount of time.. Better be prepared for plan B.Comment
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Look at the interest rate on some credit cards.
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It depends on the Term of the Loan -- 10 or 20 years normal.
For a year as example; It is at very least usury if an unlicensed lender, and in respect to any regulated loan -- deemed unconscionable and forfeit in most courts.
However, it is a relatively small amount to risk so offer a % of the profit as a joint venture. If there is no profit to be made don't take the money.Comment
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We used to make swing loans -- that is an conscionable rate of interest 50% most investors would be tickled pink with 15% in a year these days. We had all the interest reduced by court order (to the court judgement rate -- lo ball rates) on a risky 3rd Trust Deed (mortgage) loan we made once -- learned the hard way. In the end the borrower defaulted, sued us over the rate of interest to stop the foreclosure sale, then the property was condemned, discovered next to a toxic-waste dump in a LA suburb in the San Gabriel Valley. $60K face value -- we lost, got scammed, the owner booked with our money. Our security interest was in the property (worthless now).
We had a CFL (Consumer Finance Lender) license in California and the loan was made under a Real Estate broker's license c. 1981 (no statutory interest limit). We got fucked over good on that one.Last edited by Barry-xlovecam; 12-23-2012, 11:55 AM.Comment
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im speaking of short term, like couple monthsSince 1999: 69 Adult Industry awards for Best Hosting Company and professional excellence.
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if your credit is good get a loan from a bank or credit card. business or personal?TRUMP 2026 KEKAW!!! - The Laken Riley Act Is Law!
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That is way too open of a question, as it really depends on the length of time on the loan and the payback method.
Most 'loan sharks' I have ever known charge 10% per week, collectible each 7 days. So on a 5k loan, you pay $500 a week and after 10 weeks you have paid 100% in interest and still owe the principal in full. Miss a payment, lose a finger.
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everything over 5% per year is considered risky in terms of investment i learnedComment
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It's nuts if you are the one borrowing the money, but easy cash for the lender. Even if it is a bank or credit card giving you years to pay it back, it's still a ripoff for you.
If you need to borrow money, here's some tips:
- Lending is big business, and lends will compete to get your business. Shop around
- Paying back the loan faster will save you money. Make sure you have that option.
- Never make the minimum payment. Each payment back should be as much as you can afford.
- Only suckers pay 19% interest rate on credit cards. If you are paying this now on any card, call the card company and ask for a lower rate. Trust me, you will easily get 14% or even 9% just by asking. If they don't want to give it to you, tell them the competing card company (Mastercard for example) already offers it.
- Many card companies will offer you a huge discount on big loans like $5000. Even if you are paying 19%, call your card company and tell them you want $5000. They will give you the money via direct deposit to your checking account for 4.5% or less. (*)
- (* there is a catch. Most of the time they will give you 4.5% as long as you pay the loan back within 6 months. If you go past 6 months, the rate may increase to their normal rate of 12% or 19% or whatever you pay now. So if you take this route, do your best to pay it back.
- You can also try your bank but usually they make it more difficult to borrow money, however they have a cool product known as a debt reconciliation loan. The bank will lend you money to pay off your debts (credit card, government, etc), at a rate much cheaper than you are already paying. Doing this gives you 1 monthly payment to make every month, and saves your credit rating if you were in danger of messing it up by not keeping up with your payments.
Finally, lenders WANT to work with you. They are selling you a super profitable service after all. The easier you make it for them, the more they like you.Comment
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The 69-year-old American, who pocketed £7million in wages and bonuses last year, is the mastermind behind one of the biggest payday lending firms in the UK ? targeting borrowers with interest rates as high as 2,670 per cent.
Read more: http://www.thesun.co.uk/sol/homepage...#ixzz2FumdFqPfComment
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Many of those payday loan and pink slip loan places charge around 400% APR interest for their loans and some of them charge even more than that.
During the summer when I would watch the Mariner games they sometimes had a commercial where you could get $10,000 loan with just a signature. If you paused it and read the fine print it said you would pay it back at $850 per month for 60 months so you would pay back $51,000. Pretty crazy.Comment
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I looked up one of the places that was heavily advertising on TV. They charge $38 per $100 you borrow, with the loan repaid in 4 weeks, regardless of the loan amount. So a $1000 loan costs you $380 in "fees"
I think that means the effective p/a rate would be (38% / 4 weeks) * 52 weeks = 494% ?
There are also some pretty scary fees tacked on if you get behind: $30 missed payment fee, $50 arrears processing fee. So one late payment on a $200 loan and your balance increases by $80, presumably payable immediately... so instead of $50 that week you owe them $130.
I can see how people desperate enough to take out this type of ripoff loan could get even further into the shit. Payday loans are a scam that prey on the people who can least afford it.Comment
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Payday Loans are not loans at an interest rate -- they "factor" a check: (Trade in the buying and selling of personal property (your bank draft [check]).
Simpler example: A pawnshop of checks.
Pawnshops are regulated. However, subject to individual state laws (in the USA) an individual can buy property and sell it ;)
This is a $5 trillion market (*At the end of 2004, the US repo market reached US$5 trillion)-- same idea really but legitimized by SEC regulations and license -- securities are personal property. (In essence; the same as your auto or diamond ring.)A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is the sale of securities together with an agreement for the seller to buy back the securities at a later date. The repurchase price should be greater than the original sale price, the difference effectively representing interest, sometimes called the repo rate. The party that originally buys the securities effectively acts as a lender. The original seller is effectively acting as a borrower, using their security as collateral for a secured cash loan at a fixed rate of interest.
A repo is equivalent to a spot sale combined with a forward contract. The spot sale results in transfer of money to the borrower in exchange for legal transfer of the security to the lender, while the forward contract ensures repayment of the loan to the lender and return of the collateral of the borrower. The difference between the forward price and the spot price is effectively the interest on the loan, while the settlement date of the forward contract is the maturity date of the loan.
http://en.wikipedia.org/wiki/Repurchase_agreement
The 1% don't play for nickels and dimes ...Comment
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Those who take payday loans they're paying ~20% don't they...
if someone pays 20%, another would pay 50%, nothing too surprising for meOur Herbal Supplements for Adult Health - a New Revenue Stream for You - mike[at]crocmint.com
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Sorry yeah I totally mis-read that
When I was in prison I sold tobacco at 100% per week, it really is insane what people will pay when they are desperate, had a few guys buy 1/2 oz tobacco off me one week, and just continued owing me an oz, but only paying me 1/2 oz, for months and months and months. Fucking madness.Comment
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Whats happening in the UK at the moment is a scandal.
We are talking 7000% + loans. All legal.
There are some people borrowing for stupid reasons - There are also some who are borrowing so they do not freeze this winter.
That is down to the government.Comment
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Originally posted by rayadp05Comment
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There have been studies done by every province in canada on the real cost of offering payday loans.
Every independant agency concluded that the real cost, advertising cost excluded, lays between 22 and 27% of the total ammount borrowed.
That mean just to break even on a 500$ loan you have to charge back 125$ in fees/interest.
The rate of default is high.Originally posted by rayadp05Comment
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LOL, try to feed that one to the sharks.
In most real loan shark scenarios you are only making interest payments on a weekly basis. Normally you must pay the principal amount back in full, in one lump sum. You can carry this loan on as long as you like, as long as you can continue to make the interest payments weekly, or until you can pay off the loan in full.
AND, make for absolute certain you can pay the loan back, on time every time, or that you can function without a finger, or two, or three...Last edited by Max Potential; 12-24-2012, 06:02 AM.Comment
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some retail credit cards charge almost 30% so i gues 50 isn't far off from that. typically the only people i would think would take such a loan would be shady people doing shady shit.you don't know you're wearing a leash if you sit by the peg all day..Comment
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Back in the 90's I would regularly float 50k a week, I used to get involved in these types of 'loans' on a regular basis for 5-25k. I NEVER fucked up at all anytime I was involved, but I do know quite a few folks that did and really did lose pinky fingers along the way, or got the absolute shit beat out of them. Usually when I would get involved in these type of loans I would already have the principal cash set aside to pay back the loan to begin with, but did it to avoid wiping out the majority of my liquid cash at the moment.
If you are looking for loans like this, just hang out at some of the NYC strip clubs for a little while or find out where the after hours parties are happening, you won't have to find them, they will find you ;)Last edited by Max Potential; 12-24-2012, 06:13 AM.Comment
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I'll be on the next flight out
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Since 1999: 69 Adult Industry awards for Best Hosting Company and professional excellence.
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There are numerous companies in the US that offer so-called signature loans with annual interest rates of 180% or more. It's perfectly legal, and they make their money on a relatively small number of people who pay for a year or two, then go bankrupt anyway. No one takes out a $2,500 loan with interest amounting to over $13 a day unless they are desperate.
Don't believe me? Take a look at this as an example.
http://www.cashcall.com/Rates/CurrentRates.aspx
It is legal, but shouldn't be.Comment
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Usually its crazy, 50% is crazy even for one year, let alone few months.
However sometimes you find good opportunities where you can lets say double your money in few months so 50% is ok. Of course lender must have some guarantee.Comment
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