What to do with $5000? Answer inside......

[Handsome Rob]

I was just reading the thread regarding how best to invest 5 grand & have it work to make money.

Funnily enough, whilst reading the thread the Big Sky Loans company ad came on the TV & for the first time, I managed to read all the smallprint at the bottom of the screen.

They openly admit that the money they loan you 'isn't cheap' but I never realised just how EXTORTIONATE their rates were!

Did you know they have an APR of 117.1%?!?!

If you borrow $5000, you agree to make repayments of $468.58 a month FOR 84 MONTHS?!?!?!

That works out at a repayment of (sit down for this)

$40,872.72!!!!!

So there you have it. You want to make money off five grand? Lend it to somebody who doesn't know any better.

How the hell is this legal?????

[kwe45919]

Wow.......just wow. Credit Cards get people in trouble with 17% interest, with 100% interest that's like "Loan SharK" style loans....

[Guest nicemac]

Yes, but if you loan $5k to someone with credit so bad that they would consider those terms, you have to figure they will not make all of the payments.

During the time that I was in the car business, the owner of my dealership also owned several tote-the-note lots. He point blank told me he made more money off of those than he did the new car stores. He would sell the same car over and over. The down payment covers the investment. The bad credit buyer makes a payment or two- there is the profit for the lot. Then the customer misses a payment. Just a few days late and BAM! Repo. The lot sells it again the next week and starts the cycle over again. It is like magical inventory that replenishes itself every few weeks. He told me he had one car he sold six times.

[Garufa]

Kinda reminds me of when I was house hunting. Not knowing anything about mortgages I stepped into a finance/mortgage company in downtown Knoxville during lunch one day out of curiosity. I asked about home loans and they were kind enough to tell be right off the bat that I did not want a loan from them as I obviously did not need their services. I believe their rates were somewhere around 20-25%. That was just 10 years ago.

Edited February 9, 2012 by Garufa

[brent_strong]

Yes, but if you loan $5k to someone with credit so bad that they would consider those terms, you have to figure they will not make all of the payments.

During the time that I was in the car business, the owner of my dealership also owned several tote-the-note lots. He point blank told me he made more money off of those than he did the new car stores. He would sell the same car over and over. The down payment covers the investment. The bad credit buyer makes a payment or two- there is the profit for the lot. Then the customer misses a payment. Just a few days late and BAM! Repo. The lot sells it again the next week and starts the cycle over again. It is like magical inventory that replenishes itself every few weeks. He told me he had one car he sold six times.

Yup, sounds like the same type of place I worked at once.

I remember my boss salivating over the prospect of some dude missing a payment on his relatively new and valuable (probably worth around 10k at the time) Camaro.

[Caster]

I don't see anything crooked about Big Sky loans. If you'll listen, the Native American tells you plainly "Yes the money is expensive...." If you dumb enough to sign up for that......well.

[daddyo]

Making those kinds of payments to yourself, you could save $5K in less than 11 months.

[mcurrier]

Making those kinds of payments to yourself, you could save $5K in less than 11 months.

Yeah, but these younguns don't have much patience these days.

[JeffsSig]

Ill loan out 5K at 20%................................... Just let me know LOL

[Guest NYCrulesU]

I thought about starting a title loan business. Pay me? I get money plus interest. Don't pay? I get your car. Win/win.

Of course I'm not naive to believe it's that simple...but that's it in a nutshell.

[HOLEPUNCHER]

Those places really annoy me. Someone is already down on their luck, or they wouldn't go in there, and then they kick'em even harder with their ungodly interest rates.

[Guest NYCrulesU]

Those places really annoy me. Someone is already down on their luck, or they wouldn't go in there, and then they kick'em even harder with their ungodly interest rates.

Everyone has a choice. No one twists their arm to take out a loan.

[HOLEPUNCHER]

Everyone has a choice. No one twists their arm to take out a loan.

True, but unreasonable interest rates seem to keep people on their financial lash. Why not be reasonable, make some money and and give people a fighting chance to get back on their feet.,

Edited February 12, 2012 by HOLEPUNCHER

[Guest Lester Weevils]

We have the recent agitation against rich people in general and financial institutions in specific. Some of it, or even a LOT of the recent agitation may be needless or counter-productive.

However, our culture has considered usury a sin for a very long time. Am not saying that attitude is right or wrong, but historically usury has been despised for a long time.

I'm ignorant of history but do know that anti-usury laws were passed shortly after the revolution. Dunno if such laws also existed in the colonies before the revolution. Usury is one of those things "in the bible" and dislike of usury is very old.

http://www.access-je...us/Exodus_22_25

Usury is mentioned frequently in the Bible. The original definition of usury was “the practice of lending money at interestâ€, and this is what usury means from a Biblical perspective. The Bible sanctions usury (lending with interest), but the Bible disallows it when it comes to the poor. Exodus 22:25 says, “If thou lend money to any of my people that is poor by thee, thou shalt not be to him as an usurer, neither shalt thou lay upon him usuryâ€. When it comes to the poor, we can lend to them without interest and better yet we can give to them, but we should not lend to them with interest.

[Dolomite_supafly]

That isn't that bad of an APR compared to other lenders. Pawn Shop APR's are 300% on loans.

Although not as bad, I have read about certain credit cards that have 67% interest rates. They start out at less than 10% then when maxed out they jump to 25%+ and when you miss a payment they jump to 67%.

I honestly believe the companies like Blue Sky lending make it easy for those who steal identities to get their ill gotten booty..

I understand that it is the customer's responsibility to know what you are getting into but some of these lending companies should not be allowed to do what they do.

Dolomite

[Guest NYCrulesU]

True, but unreasonable interest rates seem to keep people on their financial lash. Why not be reasonable, make some money and and give people a fighting chance to get back on their feet.,

I hear you and agree. If..big IF..I ever owned a title loan business I wouldn't have outrageous interest rates. Enough to where I made a reasonable profit on my loan. Business is business...but it's wrong when it's set up for you to fail no matter what.

[Clod Stomper]

The people who would go to a place like that are not what I would consider "down on their luck". They, most likely, have consistently made poor choices and are making another one by stepping through the door of a loan shark company.

I work with a company who coaches people who are in debt or have other financial troubles (usually debt, though). By the time they come to us, they have finally come to the realization that their habits must change if they ever want to be out of slavery. And make no mistake about it, DEBT IS SLAVERY. I've BTDT and I'm still working my own way out of it. But I AM working my way out.

I don't remember this forum's policy about plugging a non gun-related business, so I won't post our company's website. But on it are testimonials of people who I have watched go from hopelessness and losing sleep at night to having a sense of hope simply by having a plan to deal with their financial troubles. There are not many better feelings, at least for me, than knowing that you've helped someone to that degree. And that's why I'll keep doing it.

Yes, these loan co's are unscrupulous low-lifes that prey on people who make bad choices. I hope the best for the people who need help, but if they would rather take out a loan at 117% (!) than come to me or someone else who can help them build self-discipline and teach them how to deal with their situation, they will only dig themselves deeper.

Will

[Guest dubaholic2]

I had a cousin that got a title loan on a car one time, and they charged him 260% interest! Wish I had some money to lend!