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Comment by fma | Hacker News Reader

Yep... Even car sales increase because people have money for the down-payment.

A large population of Americans do not have much savings. Could be bad money management, low paying jobs, bad luck (health issues) etc.

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Phht, bad money management. When loan sharks are peddling 450% payday loans people are being taken advantage of by corporations. The government needs to practice better money management, not us private citizens. Close tax loopholes.

Actually both. It was crazy when I read from a person that he preferred paying his rent over eating, but it actually makes sense: if you get to the street, and not able to clean yourself, the chances of getting a job goes down dramatically.

If you get evicted, you're going to have a lot harder time getting into another apartment, too. It's also a lot easier to get help with food than to get help with a place to live.

Also food is insanely inexpensive. Doesn’t come anywhere near cost of housing unless you have a large family.

I would definitely pay rent first, always. There are food banks to keep you from starving to death, but without a roof over your head your life is going to completely fall apart.

Usurious loans are unethical and disgusting. If people aren’t capable of effective money management, that just reinforces that the justifications used by that agency are bunk.

Practically all owns today are usurious, since interest is involved. If you look at the old testament and the Quran, this was prohibited for a reason, and we see the effects today very clearly.

Why would anyone lend money without interest?

Should probably add: why would anyone lend money without interest to someone they don’t know?

Right, lending money without interest is pretty common within families and trusted friendships. But obviously the amount of credit available loan free from friends or family is going to be significantly less than what a financial institution would give you.

Because there’s a very substantial system of laws and governance enforcing the terms of the loan.

But if there’s no money to be made, why would a business bother?

Well, if you can basically create money out of thin air, then the interest rate for loaning it out ought to be pretty low.

Especially when you will be bailed out by the government.

One reason is purely out of goodwill, to help someone out. Another way is to invest your money (which is basically what a lot of people end up doing today), this can be viewed as a form of lending, but with the possibility of making profit. So if someone wants to take a loan to start a business for example, you lend them money to own a portion of it, and hopefully get something in return. Basically what VCs do nowadays.

Living in 2019, I’m not referring to the medieval context of the word.

This is a dismissive non-argument. Interest (usury) is a disastrous and parasitic practice that inherently feeds off of the needy. We already see the effects of that today.

You'll find payday loans at upwards of ~1700 percent, depending on state regulations. It's pretty ridiculous.

I’m sure the default rate is also pretty ridiculous. That’s what the APR is paying for, after all.

Probably not as much as you think. People often take out further loans to pay their payday loans. It becomes a self fulfilling system.

Can you seriously not see how tremendously high the default rate would be on a loan to someone who can’t wait the few days until their next payday? Or how high it would be if they’re using that loan to pay off another payday loan? If you could provide those loans for cheaper, there would be competitors hoovering up the free money.

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