Loan offers in the mail today....oh happy day.

[lordairgtar]

I, as well as you guys, get offers from different loan companies saying "borrow from us". I got a new one today and I usually just throw them away unopened. But this was from some company I had not heard of. Brookwood Loans said I was "prequalified" to receive one of there loans. They offered me the grand sum of $3,500. Oh lucky me. They said I could pay them off in 36 easy payments at 96%, You read that right, not 9.6%, a whole whopping 96%. So I got out my handy dandy dollar store solar powered calculating machine and woke up the beetle who inhabits the tiny treadmill inside. Payments for the sum are $298.71 per month, which totals out to be $10753.56!!! Are there people that stupid that will bite this juicy bait hanging in front of them. The local Mafia loan shark in town gives better deals than this.

[Harry P.]

Yes, there are people that stupid. That's why offers like that exist.

Never underestimate the stupidity of the American public.

[Ace-Garageguy]

A worse deal...in Ga., pawnbrokers can charge 25% PER MONTH for the first 3 months, and 12.5% per MONTH after that. That's 187.5% per year...legally...AND, you have to put up collateral that you'll only get maybe 30 to 50 cents on the dollar-value for...AND, miss a payment and you've lost everything.

[cobraman]

That's legal ? Sounds like usury to me.

[Harry P.]

From the fine print on the Check Into Cash (a paycheck cash advance/loan company) website:

The Annual Percentage Rate (APR) for payday loans varies in each state and depends on the advance amount, fees, and terms of the transaction. The APR for a $100 single-payment payday loan may range from 260.71% to 782.14% on 14 day terms.

And yes, it's completely legal.

[Joe Handley]

I know somebody who.did a title loan on his minivan after one of his employers decided not tonpay anybody for their work and they rates on that were nearly as bad, made the 23% on credit cards if you missed a payment look cheap!

[lordairgtar]

That's legal ? Sounds like usury to me.

They are connected with Metabank, a federally licenced bank, so state usury laws do not apply.

[Tom Geiger]

The government just shut down that Western Sky company that has an Indian woman pitching absurd loans on bad cable TV channels. They claimed they were exempt from US law because they operated from an Indian reservation.

I just love this quote, “A two-week balloon loan priced at 400 percent is just inherently unsuitable for people who are in the red every month with their basic expenses,”

And yes there are enough stupid / desperate people out there to keep these companies in business.

http://articles.washingtonpost.com/2013-08-26/business/41456387_1_western-sky-financial-payday-lenders-loans

[my80malibu]

From the fine print on the Check Into Cash (a paycheck cash advance/loan company) website:

The Annual Percentage Rate (APR) for payday loans varies in each state and depends on the advance amount, fees, and terms of the transaction. The APR for a $100 single-payment payday loan may range from 260.71% to 782.14% on 14 day terms.

And yes, it's completely legal.

Look at who owns these check into cash places, you might find a large T-Bag.

[cobraman]

Heck, I will loan money for half that ! : )

[Tom Geiger]

and my favorites are the furniture rental centers like Rent A Center. Can't imagine renting furniture. They have a showroom full of cheap cardboard furniture and off brand TVs and sell them for absurd payments.

And those Buy Here - Pay Here car dealers. They get the worse high mile used cars and sell them for enormous amounts based on a weekly payment. They keep a set of keys for the car and put Lojacks in them so they can easily repo them when the loser misses a single payment.

[Ace-Garageguy]

And those Buy Here - Pay Here car dealers. They get the worse high mile used cars and sell them for enormous amounts based on a weekly payment. They keep a set of keys for the car and put Lojacks in them so they can easily repo them when the loser misses a single payment.

Yup. I ran a body shop for a guy who owned several "buy-here, pay-here" lots. He'd get a cash downpayment that was about what the car was actually worth...always more than he had in it...and then do the weekly payment deal. Everybody rides indeed. Everybody screwed more like it.

Funny thing was, he was real "religious" fellow, big talker in his church, always quoting. Seemed like he held his text in one hand, waving it around, so you wouldn't notice he was picking your pocket with the other hand.

[Harry P.]

The government just shut down that Western Sky company that has an Indian woman pitching absurd loans on bad cable TV channels...

I've seen that commercial! Funny stuff.

[Harry P.]

Seems to me that there should be some sort of legal cap on what you are allowed to charge as interest. How a place like Check Into Cash can charge over 700% interest legally is a mystery to me. And their typical customer is someone who is already strapped for cash in the first place! They obviously are taking advantage of the needy (and the terminally stupid, apparently).

[charlie8575]

Barnum said it all, and while I've been that desperate, I never gave in, largely because lack of income made me that desperate.

It's very simple- if I can't pay existing loans or other expenses, how on Earth am I going to pay one more, especially one that expensive?

If you do toss those offers (and I hope you do)- be sure to rip or shred them first. Last thing you need is a crook going through your trash and then trashing you financially.

Buy-here/pay-here lots- I guess it depends on where you are. We have a couple around here that are reasonable with their prices and have decent reputations. I've never heard of those guys using Lo-Jack, although I suspect where Massachusetts tends to be rather consumer/debtor-friendly, they might not be allowed, nor are they allowed to keep a key for the car, they have to show up with a sheriff's deputy and either collect payment in full or as otherwise agreed (and accept it), or repossess the car. Like everything else, do your research and use caution.

Given my situation the last few years, the buy-here/pay-here is my only option short of a cash deal for something, and with used cars having gone into orbit, that's becoming less and less of an option. It all comes down to protecting yourself and knowing what you're buying.

Charlie Larkin

[Ace-Garageguy]

I've never heard of those guys using Lo-Jack, although I suspect where Massachusetts tends to be rather consumer/debtor-friendly, they might not be allowed, nor are they allowed to keep a key for the car, they have to show up with a sheriff's deputy and either collect payment in full or as otherwise agreed (and accept it), or repossess the car. Like everything else, do your research and use caution.

The fella I mentioned in post 12 was also one of the first to use remote "immobilizers" with GPS.. Miss a payment and your car wouldn't start. Then in a couple more days, it disappears on the hook.

Of course there's a "rest of the story" here too. Not all of the patrons of "buy-here, pay-here" lots are paragons of virtue who have fallen on difficult times. I've seen many repo-ed vehicles come in that were apparently uninsured, wrecked, hidden and reported stolen, and I've also seen them vandalized to the point of being total losses.

One once-nice little Mazda FWD V6 coupe came back on the hook completely, intentionally destroyed. It turned out the idiot owner had run the car out of oil and blown the engine. Then while attempting to "fix" it, he'd piled up every greasy part that would easily unbolt from the engine inside the interior. Then when the "repair" efforts failed, he'd taken, apparently, a sledge hammer to every body panel, window, and all the engine bits.

Great folks on both sides of the game.

[lordairgtar]

, and with used cars having gone into orbit

And you can thank the treasonous Cash For Clunkers program for that.

[charlie8575]

And you can thank the treasonous Cash For Clunkers program for that.

Oh, I do.

I was at my preferred junkyard a couple of months ago trying to get a new gas tank for my mom's car, and they didn't have one, turns out they all rust in half like hers did, so Dave offered to order me a new one, and I said sure, go for it.

Between the huge influx of "scrap" metal, the resultant price crash in an already depressed economy, and now with so many junk cars artificially off the road early years ago, a lot of yards can't meet expenses. Dave's dad started the yard in 1953 and last year, he had his first layoff- EVER, with a guy who we've all become friends with and had been an employee there for well over twenty years. It killed him to do it, but with no steady supply of real clunkers, business is way down. CFC did nobody any favors in the long term, it simply got people to spend money many of them shouldn't, dried up the supply of good older used cars that people in the lower echelons of the earning brackets, like myself, or people who simply don't like to spend a lot of money (also me when I have it, becuase I never know when I will or won't,) end up getting harmed, and the cars left- good luck finding the parts in far too many cases- again, all from artificial manipulation of the market.

And now that a lot of yards are having their arms all-but-twisted into putting themselves out of business by selling cheap replacement parts, or as Dave said to me, "I almost have to help put myself out of business," it's a wonder a lot of them are still open.

Charlie Larkin

[Tom Geiger]

and with used cars having gone into orbit

There's no such thing as a $100 car anymore. With scrap prices for nearly any car at $500, a car that runs at all is worth $1000. I'm not one for car payments and I've always managed to find older low mile cars for reasonable money. With a bit of patience and shoe leather in the search you can find a 50,000 mile car that will serve you well for many years for $2-3,000.

[Ace-Garageguy]

...CFC did nobody any favors in the long term, it simply got people to spend money many of them shouldn't, dried up the supply of good older used cars that people in the lower echelons of the earning brackets, like myself, or people who simply don't like to spend a lot of money

...And now that a lot of yards are having their arms all-but-twisted into putting themselves out of business by selling cheap replacement parts, or as Dave said to me, "I almost have to help put myself out of business," it's a wonder a lot of them are still open.

Charlie Larkin

Yup, and another really good illustration of what happens when knee-jerk politicos and business managers who SHOULD know better but don't, stir the pot without having a CLUE of the inter-relationships and who might be hurt down the road.

But I still hear 30mph mommies and their soft-handed husbands saying the CFC program was a good thing for getting rid of all those horrible ugly old deathtraps.

I used to be able to buy a complete good-running 4-dr granny car for a few hundred bucks, and get a dandy rebuild-able V8 engine, gearbox, and rear end, part out most of the rest of it, and come out even on the deal. Hot rod parts, ya know? Nevermore.

[Tom Geiger]

...CFC did nobody any favors in the long term, it simply got people to spend money many of them shouldn't, dried up the supply of good older used cars that people in the lower echelons of the earning brackets, like myself, or people who simply don't like to spend a lot of money

I don't believe Cash For Clunkers hurt the used car market much. Most of the cars that got traded in were at the end of their useful life anyway. A buddy-0-mine traded in an old Jeep wagon with 250,000 miles on it and got a new Honda Civic. I was interested so I toured a bunch of local car dealers on Sunday (when they were closed) to look at the CFC trade ins. You could spot them easy because the dealers pretty much kept them all together at the back of their lot. What a bunch of loser cars. Mostly beat to death SUVs like old Explorers and tons of rotting mini vans. On one lot I saw a Caddy Catera that I thought was very nice until I walked around it and saw that the entire passenger side was wiped out. No doubt totaled. And those were troublesome cars that deserved to die!

I just checked out the Philly Craigs List and there are plenty of decent cheap cars out there if you care to spend the time to seek them out.

[Ace-Garageguy]

SEMA's opinion on the Cash for Clunkers deal: http://www.sema.org/sema-news/2009/05/sema-confronts-cash-clunker-myths

If you don't want to read it all, this is one of the closing paragraphs:

“Scrappage programs as proposed will also hurt thousands of independent repair shops, auto restorers, customizers and their customers across the country,” said SEMA Vice President of Government Affairs Steve McDonald. “This industry provides thousands of American jobs and generates millions of dollars in local, state and federal tax revenue. It is time to help the entire auto industry with programs that focus the incentive on the purchase of new vehicles, not destroying valuable old cars and parts.”

------------------------------------------------------------------------------------------------------------------------------------------------------------

SEMA News, Dec.19, 2013 regarding Cash for Clunkers: http://www.sema.org/?q=node/1701

[Mike_G]

From the fine print on the Check Into Cash (a paycheck cash advance/loan company) website:

The Annual Percentage Rate (APR) for payday loans varies in each state and depends on the advance amount, fees, and terms of the transaction. The APR for a $100 single-payment payday loan may range from 260.71% to 782.14% on 14 day terms.

And yes, it's completely legal.

Not in Oregon- we ran a bunch of those businesses out of the state a few years back.

[Tom Geiger]

I noticed right after the holidays the car title loan folks are advertising on the low budget tv channels to pay your Christmas bill by taking out a loan on your car!