… and other payday, title and short-term but high interest lenders. I single this one out, however, because of their obnoxious radio ads. "Even if you have bad credit or your credit cards are maxed out, we have money to lend you!" God knows what the interest rate is. That's the last thing a person in that kind of financial position needs.

I did once, about 15 years ago, take out a loan of this kind (a personal loan but still high interest), but I paid it off early (there was no pre-payment penalty on this one), and my finances were nowhere near that precarious.

This message has been edited. Last edited by: egregore,

I love the holiday spin...

"You haven't been able to budget for Christmas Gifts or the means to travel to see your family, so just take out a title loan on your car!"

Yeah, that makes perfect sense!!!

I have not seen those commercials in my area although I know there are a good number of locations. I guess business here is so good, they don’t need to advertise.

Maybe the saddest thing about it is that they could rename all of them "Predatory Loans R Us" and they would still do a booming business.

Is this another one of those things the government needs to protect us from?

Has anyone here used a payday loan type place successfully?

I've always imagined that the payday loan places are a precursor to bankruptcy. Not a judgement but a mathematical opinion. I cannot see how someone could work their way out from under that sort of percentage rate. The rates I see advertised are often in the high 20's!

quote:

Originally posted by sigfreund:
Is this another one of those things the government needs to protect us from?

While I'm not a proponent of big government "protecting" us from everything, I will say that the nice side-effect of these type of predatory payday loans being illegal in Arkansas (and 17 other states) are that those of us who live in such states don't have to put up with their obnoxious advertising.

In AR, personal loans are capped at 17% APR. That's still a stupidly high interest rate to be paying IMO, but nowhere near that of many short-term "predatory" loans, some of which are over 80% APR.

All making payday loans illegal here has increased the number of title loan places. You can’t go a mile or 2 in any direction in the valley without running into a titlemax or similar

And they have registration loans here, which from what I understand is basically an unsecured loan because it’s for people that don’t have a title due to a bank already owning the title to the vehicle.

I’ve been fortunate enough to never need to use any of these services so I don’t know much about them, but their commercials are annoying.

A good friend of mine told me one very important statement:

"It's very expensive to be poor" and when you really think about it, poor people pay extra for everything, food because they can't buy in bulk when it's on sale, and on and on. BUT, from what I've seen, most people are poor because they have a demon that keeps them poor, drug/alcohol addiction, shopping addiction, gambling addiction, etc. etc.

Worked with a lady in college at a car dealership.

She was thinking about a title loan so she & her husband could go to the beach (90 miles away) for the weekend.

IIRC, she was in her 40s & I was early 20s.

I talked her out of it & explained that it was a terrible idea.
If you can't afford to go, getting your car repo'd isn't the way to go about it. Set aside $20-50/wk & go at a later date.

I was working 50-60hrs/wk just to keep my bills paid while going to school full-time. Money was a precious commodity.

I once calculated a rent-to-own place was effectively charging 160% annual interest. I tried to explain this to some people that worked for me at the time and they just didn't get it. "But if you don't have money now and you need furniture it's not bad..."

Yes it is bad. Use milk crates and 2x10's and save enough to buy furniture.

I do repairs in some of these places TitleMaxx and One Main Financial are the two that come to mind at the moment. Every time I go in one, I look at the interest rates and shake my head, it's amazing how much they charge. Every customer that walks in I want to pull aside and beg them not to do it. All the employees do when there is not a customer in the store is call people for late or returned payments.

They are a giant scam. There is no way for most to escape and they are stuck making high interest payments for long periods of time.

There were some scumbags that had TV ads a few years ago that were astonishing when you read the fine print. You were paying out about 60% up front, being added to the principle balance, with an APR of 343%.

They have since shuttered their doors. Western Sky was the name of the loan sharks.

quote:

Originally posted by Beancooker:
There were some scumbags that had TV ads a few years ago that were astonishing when you read the fine print. You were paying out about 60% up front, being added to the principle balance, with an APR of 343%.

They have since shuttered their doors. Western Sky was the name of the loan sharks.

I remember that one. Native American firm operated from tribal land. That was their loophole, the tribal land.

My related rant is passing out credit cards to college freshman like candy. If you want to help them then make it a card with a low limit and make it like Amex where it has to be paid in full each month or it gets shut off. This could teach them to budget and manage money. It often times doesn't work out that way.

There've been loan sharks for millennia. This is nothing new.

quote:

Originally posted by BBMW:

There've been loan sharks for millennia. This is nothing new.

I'm a Jew, don't know that much about the New Testament, but I have sort of a hazy impression that Jesus chased some loan sharks out of the Temple.

Is that correct?

quote:

Originally posted by V-Tail:
I'm a Jew, don't know that much about the New Testament, but I have sort of a hazy impression that Jesus chased some loan sharks out of the Temple.

Is that correct?

Not loan sharks, specifically. Jesus chased sacrificial animal merchants and "money changers" (e.g. currency converters) out of the temple.

Jewish pilgrims would travel to the temple, where they would have to convert some of their Greek/Roman currency to Jewish shekels, so they could then use those shekels to purchase animals from the vendors to offer as sacrifices, and also to pay the temple tax.

But it's suggested that the money changers likely had been charging steep conversion rates in order to net themselves nice profits. Basically taking advantage of the pilgrims. So somewhat similar to a loan shark.

As I understand it, Jesus chased out the money changers because they were 1)in the temple and 2) working on the Sabbath. Loan sharks exist because there is a demand for them. Poverty is a choice.

quote:

Originally posted by Fredward:
Loan sharks exist because there is a demand for them. Poverty is a choice.

In this country and in this day and age, this is very true. It's hard for me to feel sorry for people who put themselves in this position. It's pretty much self created.

Jim