I think Upstart is trolling me...

[kms]

Don't get me wrong, I'm used to receiving and ignoring credit card and personal loan offers by snail mail all the time. However, this one is definitely worth sharing because it is by far the most ridiculous loan offer I have ever received.

It's by a company/lender called Upstart. Usually, I open those offers up to check whether they happen to have 0% APR for a few months. If so I look at the fine print, if not I toss them out right away. However, it struck me as odd right away that they did not advertise a ridiculously low decoy-APR in big bold letters for everybody to see. I'm used to the APR in screaming letters printed all over the front page. So I started turning the pages but could not find any sign of their APR in the brochure. Instead, the following phrases stood out:

Debt consolidation in large bold letters the title page.

Then a list of possible things to use the money for (debt consolidation, remember?): pay off credit cards, start or expand a business, remodel your home, pay medical bills, make a large purchase, relocate, travel, athletic training, and more...

Then there's the usual marketing mumbo-jumbo about how great they are, as well as some definitely authentic "Testimonials from actual Upstart customers.", including the following:

"Thank you for helping me through a time when interest rates on credit cards are going up and up. It's a huge relief to receive a loan with a fixed interest rate. The process was easy and the response was quick."

"Really appreciate the quick turnaround. I have been thinking about consolidating school loans and credit card debt for years. Thank you!"

Still, no mention of any APR. Until I got to the final page and the fine print. And here's where I nearly fainted...

"The average 3-year loan on Upstart will have an APR or 20% and 36 monthly payments of $35 per $1,000 borrowed."

Disregarding the fact that 36 monthly payments of $35 per $1,000 borrowed equal an APR of 15.7% and not 20% (which in turn would result in 36 monthly payments of $37.16... but who cares about math, right?) I am in all seriousness asking myself who on earth would be stupid enough to apply for a loan with an average APR of 20%?

What I am even more curious about is why they think that I could be even remotely interested in this. I have $0 credit card debt (and never EVER had any, never carried a single balance in my entire life), I have no loans, just turned down a car loan offer of 6.14% while literally laughing in the bank employee's face over the phone, never defaulted on any loans, and my credit scores are in the Excellent range of 750+ points.

[ysette9]

Yowza. Someone got their wires crossed, I see. It is interesting to see what is out there being targeted to customers with less stellar credit.

One thug I enjoyed about the financial crash was how the credit card offers in the mail dried up. It made for less recycling.

[kms]

I left the country for several years in summer of 2008 so I never experienced the credit card offer drought.

I'm almost tempted to go through with the application just to see how bad the offer is going to be. However, I'm sorta afraid they'll run a credit check and I'll end up with an unnecessary hard inquiry from them on my credit history.

[marty998]

Still, no mention of any APR. Until I got to the final page and the fine print. And here's where I nearly fainted...

"The average 3-year loan on Upstart will have an APR or 20% and 36 monthly payments of $35 per $1,000 borrowed."

Disregarding the fact that 36 monthly payments of $35 per $1,000 borrowed equal an APR of 15.7% and not 20% (which in turn would result in 36 monthly payments of $37.16... but who cares about math, right?) I am in all seriousness asking myself who on earth would be stupid enough to apply for a loan with an average APR of 20%?

I would suggest the difference between 15.7 and 20% is the fees they tack on when you take the loan out.

Fees and charges can be just as oppressive on small loans as the interest charge.

[LennStar]

Still, no mention of any APR. Until I got to the final page and the fine print. And here's where I nearly fainted...

"The average 3-year loan on Upstart will have an APR or 20% and 36 monthly payments of $35 per $1,000 borrowed."

Disregarding the fact that 36 monthly payments of $35 per $1,000 borrowed equal an APR of 15.7% and not 20% (which in turn would result in 36 monthly payments of $37.16... but who cares about math, right?) I am in all seriousness asking myself who on earth would be stupid enough to apply for a loan with an average APR of 20%?

I would suggest the difference between 15.7 and 20% is the fees they tack on when you take the loan out.

Fees and charges can be just as oppressive on small loans as the interest charge.

Here in socialist Germany (and probably all of EU) they have to give you a % number that includes all, including fees.
Luckily you guys still have a bit of Free Market left!

(That was Irony. I just like to toss around the "socialist hell" from time to time. You know, when I hear "But you pay so high taxes there!" I have to write "But I pay less directly on healthcare in a year than you do in a week" or "He had to pay back the maximum student debt, nearly 10K for a 4 year degree!")

[ysette9]

I wish I had saved the article link so I could reference it now. I saw something several years back about a study of people in the US versus the UK. They controlled for things like race, income, and education and found that comparable people in the UK lived longer than their US counterparts. The study authors were hypothesizing that the existence of a social safety net in the UK led to less overall pervasive stress that led to longer lives. Not having in the back of your mind that a medical diagnosis could wipe out everything you worked hard to build, for example, might have substantial positive effects aside from the obvious reduced risk of financial catastrophe.