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Brick and mortar or online, still basically a loan with a very high interest rate (~36% in this case) while also putting up collateral worth more than the loan.

Only use these services in the most dire of financial circumstances. If you're in a situation where you have to pawn valuables, it may be time to start thinking about getting a normal job to reassess and regroup.



I don't know where you're getting ~36%? Borrower in OP had a 3% interest rate, and the article stated an industry average of 10-20%.

With that aside, I don't entirely disagree with your argument.


Interest on loans/credit is reported in terms of annual rate, not monthly. This loan at 3% per month is 36% per year. You won't find a credit card in the US at an interest rate that high.


I would not be so sure about credit cards. I was in search for basic credit card when just moved to USA to start my credit history somewhere... I was offered credit cards which are:

1) Secured. I.e. I have to have whole credit line amount as a cash on CD with the same bank.

2) Annual fee is 50% of credit limit

3) standard APY 37.5% and penalty APY even higher

4) Credit line - less then $500

And I bet this one was not worst one.


OP had a 3% _per month_ rate.


I'm betting that 3% was compounded monthly too, so the net effect would be higher than 36% - probably north of 40, but I can't be bothered to do the math.




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