Hacker News Reader

Comment by imaginenore | Hacker News Reader

This is f#$%ing ironic:

https://tctechcrunch2011.files.wordpress.com/2016/01/lendup_...

At only 392.38% APR, we "won't screw you over" in any other way.

Am I the only person that thinks representing a loan only designed to be held for a week or two at an annual rate is about as useful as the weatherman giving the forecast in degrees kelvin?

It's a payday loan. You pay it back plus $10-50.

And this is supposed to be "predatory"? Jeez. I'd have been screwed a few times without these evil "loan sharks".

Yeah APRs are silly to apply here. Go rent a $300 TV for a week and then return it a day late and pay a $20 fee. If you wanted, you could call that a 2,500% APR.

There's an argument that could be made that capitalism is based on the idea that those who understand compound interest are allowed to exploit those who don't.

So no, you're not the only person who thinks that. And there are plenty of people who want you to keep thinking that. Especially people with bright new financial services apparently aimed at making the wealth gap even worse than it is already.

Robbery by math.

You and I have tremendously different definitions of robbery. Every legitimate payday loan outfit I've looked at is pretty much above board with what they charge and how they work.

Borrow X, repay X + Y on Z date, usually no more than a month in the future.

So sure, if you feel fully informed consent is exploitative in any way.

And the entire population aced math in their well funded school system with small class numbers and well paid capable teachers, so no worries.

I suspect we don't have different definitions of robbery so much, as of when it's appropriate to take advantage of people's ignorance and when it isn't. You'll understand better when somebody has taken advantage of yours.

How does this increasingly contrived person who has a job and paychecks/DDs into a bank account (all three of which are prerequisites for most payday loans) not understand first grade math?

Please. The entire existence of Las Vegas is predicated on people who didn't understand high school math.

I'm a perfect use case for this service, so I guess I'll tell you my story. My credit score is pretty low. Low enough that I apply for high interest cards with my bank and get rejected.

I have a high income and an equally high number of expenses. Each month I have about 300-600$ in "discretionary" income. I also have a partner with a very low income and a son. My partner is trying to get on her feet right now and there is a high degree in variability with her income and needs. She has recurring medical bills and there are constant one time medical expenditures when you have a child. Not to mention birthdays, once in a lifetime kind of events where your child gets to participate, there are family and friends that are worse off financially and need help from time to time.

I don't like, respect, or particularly want to use my banking services. I don't trust them but having a checking account is a requirement. Every time I have 500$ it makes me sick to my stomach to imagine handing it over to them, given the fees and backhanded tactics they use. I don't trust them. I imagine I might get a secured credit card sometime, but handing over the 500$ and waiting two weeks to a month for my own money back, again, just makes me kind of sick.

This service would help me in an emergency, and help me build credit (if not to the same extent as a secured credit card)

I totally sympathise, the US health system is just a disaster.

YMMV but - I had a US bank account (I was a foreign student, low income) for 10 years. Didn't cost me a cent. Made money on interest, and had a perfect credit rating when I graduated. Found a small community bank that was free provided you kept a minimum balance of $1000. Savings and Loan are an equally valid alternative (not even sure what the difference is got the same service from both - except the S&L would cash foreign checks for free).

Thing is, people think banks are evil for charging 14.5% APR for an unsecured personal loan. But they think these guys are great for charging a minimum of 29% APR - but as far as I could see more like 200%+ for an unsecured personal loan???

Holy math fail batman!

Don't bank with citizens or bank of america, and do your due diligence like you would any other purchase. There are plenty of good banks out there who would be happy to do business with you. Go in, ask to speak to the bank manager, explain your circumstances, ask questions you already know the answer to to calibrate, and treat it like any other business arrangement.

You're right a secured credit card is also better than these guys, they'll only charge you 27%APR or so. Still not as good as a bank.

The first question to ask is: how much would be owed and a payday loan shop?

The second question to ask is: what is the percentage of non-payment. What is the expected return of LendUp per customer?

I don't know these answers... But asking is better than accusing

Payday loans and predatory loan interest rates are illegal in at least several EU countries, like Belgium for example (sorry, link in Dutch):

http://economie.fgov.be/nl/consument/consumentenkrediet/Kred...

Absolute max APR is 11.5%. Charge more, and the consumer can just walk away from your shark credit without paying any interest.

I wonder if there's been any scientific research on the effects (or the absence!) of such legislation. Anyone?

https://www.lendup.com/ Dragging the sliders around, the APR varies between 203% to 755%. Granted, these are risky loans offered to people with bad/no credit record.

It seems that rates "as low as 29%" (still higher than a credit card but lower than payday-type loans) are only offered to repeat customers with a demonstrated repayment history.

Exactly. Or a mere 29%! Would be interesting to know where the difference is coming from.

Guess the poor will be staying poor.

Short term loans have artificially high APR.

Reply on news.ycombinator.com