This has got to be the highest interest rate I've ever seen...

[Cheshire Figment]

When I was in college I worked part time in a combined Pawn Shop and Liquor Store just outside a major military base. I was working there when the Federal Reserve Regulation Z, which required posting of Annual Percentage Rates, went into effect. As I wqs an Accounting major, my boss asked me to make up a chart for all loans from $1.00 to $100, which I did. One of the assumptions made was the person redeeming an item would have had the money for a full month.

Based on the way we had our fees set up, when you got up to a loan of $23.00 the APR was down to 200%. Lower rates had a higher APR. And since the calculations were based on a full month, for almost everyone who redeemed the pledge they actually had the money for much less than a month (sometimes even less than a week) so the APRs were actually much higher.

 

[luvsJack]

They have rent to own jewelery too!!

My sil used to work for a rent to own furniture store. I went in to get her for lunch one day and saw the huge diamond rings. I thought they were fake but the manager said they were real and for rent.

Several places have popped up around here where you can get a storage building rent to own


As for the loan. My niece is a CPA and has done audits on a few of the payday loan places. Nothing but legal loan sharks. It is sad that the govt. lets these sharks prey on those most vunerable-the poor (that is exactly who loses out by using these kinds of places).

 

[marie1203]

Just yesterday my DH was telling me someone he works with got a car loan at 24% I couldn't believe now 42% tops that!

 

[dfchelbay]

My husband got "pre-approved loan offer" in the mail this afternoon. It's a check for $750.06 that if we cash, we then have to pay back at $55 a month. We have no interest in such a loan, but just for amusement I turn the page offer to see the loan terms, interest rate, etc. before putting it through the shredder.

The interest rate is 42.73%!!!! It would take 19 months, just over a year and a half, to pay this back.

I know it's "let the buyer (or borrower) beware" but I feel so bad for people who fall for these things. And it's sent out right before Christmas, when people are more apt to take an offer like this to buy their kids presents. In fact, part of the flyer that comes attached to the check says "Real Holiday Check".

I know, I know, personal responsibility and all that. Still, rates like this are insane!

I would also be highly concerned that if I cashed that check, they have all my bank account information too.

 

[Nebraska_Disney]

These "offers" would not be out there if the idiots using them would stop. Does anyone know how to "Live within their means" ??

 

[luvsJack]

These "offers" would not be out there if the idiots using them would stop. Does anyone know how to "Live within their means" ??

What you are saying is true, but sadly sometimes they manage to catch people that are stuck in a hard place and at their most desperate and it makes it seem too easy to just go get the loan. They get the loan to fix whatever problem they are having, then they have to pay it back, can't do that and then extend the loan or have to struggle to pay it back. There has to be personal responsiblity but there needs to be some kind of limit to what these places can charge in interest, finance fees, etc.

These things go out in droves right before school starts to help with "school clothes shopping", right around Christmas to help with that shopping, and other times when people may get caught feeling like they "have to have" a certain amount of money. I mean really, some parents get pretty desperate to come up with cash to provide their child with school clothes or winter clothes or a big Christmas. There are a million and one better ways to get those things but they send these out and "all you have to do, is cash the check"--makes a much too easy solution to a problem.

I hate this practice of just sending out these checks. I am so afraid someone is going to get my mail and cash one of these things!!!

 

[angierae]

No, there is an industry that makes money loaning to people who have a proven history of being bad credit risks. Good for them. Let them soak those losers for every penny they can get because the only way they got themselves in that position was by defaulting on decent cards, which raises the rate on all of the good credit users. Let them suffer, they earned it.


Don't feel bad for them feel bad for yourself. The high default rate makes borrowing way more expensive for good borrowers than it should be.

Wow, really? I had bad credit for a long time and it never had ANYTHING to do with credit cards, it had to do with having an extremely sick little girl and unable to find a job with health insurance. I had a LOT of medical bills thrown at me at once.

Not everyone with bad credit is a "loser" who just doesn't want to pay their bills or who racks up huge credit card bills for the fun of it.