Author Topic: Why some people are paying higher interest in Lending Club to finance debt?  (Read 4078 times)

watermen

  • 5 O'Clock Shadow
  • *
  • Posts: 15
I was browsing notes just now, in some of those F and G notes, I just don't understand why some people who have an interest rate of 15% for their credit cards, are willing to pay 22-23% to lending club to consolidate their debt? Isn't it weird, and a lot of them get their funds really fast.

I just don't understand, or am I missing something. Please, someone kindly explain, I am still new in is.

Rangifer

  • Stubble
  • **
  • Posts: 118
23% is still better than 29.99%

they may also get one payment that is lower than paying several credit card minimums.

TomTX

  • Walrus Stache
  • *******
  • Posts: 5345
  • Location: Texas
Once they pay off the (maxed) credit cards, they can go charge stuff again, of course!

Rangifer

  • Stubble
  • **
  • Posts: 118
Also, stay the hell away from F and G grade notes. Once you take the default rate into account, they don't do any better than C grade notes.

arebelspy

  • Administrator
  • Senior Mustachian
  • *****
  • Posts: 28444
  • Age: -997
  • Location: Seattle, WA
Also, stay the hell away from F and G grade notes. Once you take the default rate into account, they don't do any better than C grade notes.

So would you advise to stay the hell away from C notes as well, since they apparently do the same as F and G, for which you give that advice?
I am a former teacher who accumulated a bunch of real estate, retired at 29, spent some time traveling the world full time and am now settled with three kids.
If you want to know more about me, this Business Insider profile tells the story pretty well.
I (rarely) blog at AdventuringAlong.com. Check out the Now page to see what I'm up to currently.

watermen

  • 5 O'Clock Shadow
  • *
  • Posts: 15
23% is still better than 29.99%

they may also get one payment that is lower than paying several credit card minimums.

Some of them said their credit card interest is like 15%, but they are borrowing from lending club for 22%, that is what puzzled me.

Forgive me, I don't have much experience with credit card, I only have one card and it automatically get paid off from my checking account every month, therefore I never pay attention to interest rate, since I had never owe money.

Does most credit card charge 29.99% if you can't pay off everything?


Rangifer

  • Stubble
  • **
  • Posts: 118
Also, stay the hell away from F and G grade notes. Once you take the default rate into account, they don't do any better than C grade notes.

So would you advise to stay the hell away from C notes as well, since they apparently do the same as F and G, for which you give that advice?

You got me!

What I meant to say is that they do worse than C notes.

Skyn_Flynt

  • 5 O'Clock Shadow
  • *
  • Posts: 78
  • Age: 55
  • Location: North Carolina
People can easily end up paying 50% interest at those "rent to own" stores and pawn shops. Somehow the idea of $50 a month for a year sounds more appealing than paying $400 today, and folks will not grasp how high that implicit rate really is.

grantmeaname

  • CM*MW 2023 Attendees
  • Walrus Stache
  • *
  • Posts: 5960
  • Age: 31
  • Location: Middle West
  • Cast me away from yesterday's things
Isn't that like 100% interest?

 

Wow, a phone plan for fifteen bucks!