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To: A. Pole

One the one hand, I can see the need for places like this... When someone with no credit needs some money to get by for a short period of time, it can be helpful, but at the same time, it can be a trap.

On the other hand, due to the fact that the loan company is working with people with either bad or no credit history, it is inherently a high risk business. So they should be allowed to charge higher interest rates.

On the other hand, lending laws of the states should be such that if a car is repossed and sold off, after documented expenses, any remaining funds should revert back to the person who was the owner of the vehicle. And there should also probably be rules giving the owner a chance to try to get the vehicle back before it can be disposed of. Possibly a "waiting period."

All in all, it's an ugly situation. I had to work on some computers at a "payday loan" company once, and I saw the loan contract. IIRC, the APR works out to about 400%, due to the high interest rate and short terms of the loans (2 weeks).

Mark


8 posted on 02/17/2005 5:57:24 AM PST by MarkL (That which does not kill me, has made the last mistake it will ever make!)
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To: MarkL
So they should be allowed to charge higher interest rates.

By whom? You might be able to convince me that the state should be allowed to mandate that lenders follow some standard method of stating the effective annual interest rate on the loan application. But, as far as any limitations on the rate itself, that's for the lender and borrower to decide.

16 posted on 02/17/2005 6:18:52 AM PST by newgeezer (Just my opinion, of course. Your mileage may vary.)
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