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Comment by gtremper | Hacker News Reader

Considering their default rate is surely higher that 0.75% (1.5/200), how is that sustainable?

Couldn't a rate in between these 2 extremes work? Like a 70% APR?

That's breaking even at a ~5.83% default rate, which is still unrealistically low. If they have a default rate of 20%, they'd need at least 240% APR to break even (assuming 1 month loans).

That's 20% monthly default, but better to think about an annualized default rate, which at 20% would be much more manageable, right?

The default rate would be lower with a lower interest rate. #secondordereffects

Someone has more trouble paying off $228 instead of $200?

Granted, it could be right at an invisible tipping point, but let's be honest.

> Someone has more trouble paying off $228 instead of $200?

Yes? That's like a month's food for some folks.

$28 is a month's food?

I lived on $50 of food in New York for a month, but it was a deeply unhealthy experience. Can't imagine $28, even with a CoL discount.

(it was rice, beans, and whole frozen chickens + volunteering at a homeless shelter which bought 1.5 meals a day)

For me? No. For someone in poverty eating ramen, mac-and-cheese, and rice/beans all the time? Sure. $20 is a lot of money for plenty of people in this country.

Yes, maybe not in NYC, but in other place. Or it's half a month's food. Or a month's public transportation to and from work.

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