The Money Mustache Community
Around the Internet => Antimustachian Wall of Shame and Comedy => Topic started by: cloudsail on May 27, 2015, 01:39:28 PM
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Driving to the train this morning I heard an ad on the radio for a loan company that emphasized their LOW rate of 11.39% APR!!!
If that is really considered low for these kinds of loans (payday, etc.), I feel really really sorry for people who need them.
As a side note, for the longest time I didn't understand the whole concept of payday loans and check cashing. They didn't exist in the country where I was born and spent a large part of my childhood in, so when I saw them everywhere in North America I was very puzzled as to their purpose. I even remember asking my husband why people would pay to have their check cashed instead of just putting it into their bank account. He explained that it can take a few days for the check to clear in the bank and some people need the money right away.
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If that rate is for a check cashing/payday loan business it is a steal. Those loan rates are typically in the 30% range and that's in states that put a cap on them. In unregulated markets those rates end up with an APR of several hundred percent.
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If that rate is for a check cashing/payday loan business it is a steal. Those loan rates are typically in the 30% range and that's in states that put a cap on them. In unregulated markets those rates end up with an APR of several hundred percent.
Wow, I had no idea. I can't believe these kinds of businesses are legal. Seems very profitable though..... hmmm........... sadly I don't think I could live with myself making money this way.
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Payday and title loans are frequently in the 400% interest range when you count their fees too.