When did loansharking become legal in the US?

[sly_wolf 199]

http://www.westernsky.com/General/Rates.aspx

[Teddy B 17,251]

It's an Indian Reservation, a sovereign nation, they don't play by the same rules.

[sly_wolf 199]

It's an Indian Reservation, a sovereign nation, they don't play by the same rules.

They have adopted the evil ways of the white man Prey on the desperate.

[JohnR! 5,495]

http://www.westernsk...eral/Rates.aspx

It is not loansharking. They are operating within the rules of a deregulated financial market.

You mustn't worry. They create tons of jobs and eventually all that money will trickle down.

[Teddy B 17,251]

They have adopted the evil ways of the white man Prey on the desperate.

The desperate and most likely high risk folks that have bad or no credit. There must be a demand for it otherwise the rates wouldn't be that high.

[^_^ 5,021]

It is not loansharking. They are operating within the rules of a deregulated financial market.

You mustn't worry. They create tons of jobs and eventually all that money will trickle down.

[Teddy B 17,251]

It Is Expensive, But There Is No Collateral Required

In the commercial, the spokesman claims Yes, the money is expensive, but there is no collateral required. This is a common theme within the payday loan industry.

Before you borrow money from Western Sky, look at their Rates page which describes the APR as well as the loan fee that will be assessed depending on the loan amount you are requesting.

The APR, or Annual Percentage Rate, is the amount of interest you will be required to pay back within a year. When loan companies do not require collateral or high credit scores to approve a loan, it is generally because the APR they charge is extremely high.

In the case of Western Sky, the lowest available APR is 116.73% and can be as high as 215.03%. This means that if you borrow $5,000 from Western Sky at 116.73% APR and take the full 84 months to pay it back, you will have paid $35,872.72 in interest.

My link

Damn, 215% APR! I'm opening up a new business, who wants to borrow some money?

Edited August 14, 2012 by Teddy B

[sly_wolf 199]

http://en.wikipedia....wiki/Loan_shark

A loan shark is a person or body that offers loans at extremely high interest rates. The term usually refers to illegal activity, but may also refer to predatory lending with extremely high interest rates such as payday or title loans. Loan sharks sometimes enforce repayment by blackmail or threats of violence. Historically, many moneylenders skirted between legal and extra-legal activity.

[rocks 494]

Damn, 215% APR! I'm opening up a new business, who wants to borrow some money?

I've looked at this before it's quite shocking! It's only 215% up there?

Loan Product....Borrower Proceeds.......Loan Fee...........APR..................Number of Payments....................Payment Amount

$850 Loan.........$500..........................$350..............342.86%...............12..........................................$150.72

They even tell you in their commercials that their rates are high, but I don't think anyone expects 350%!

Edited August 14, 2012 by rocks

[Teddy B 17,251]

I've looked at this before it's quite shocking! It's only 215% up there?

Loan Product....Borrower Proceeds.......Loan Fee...........APR..................Number of Payments....................Payment Amount

$850 Loan.........$500..........................$350..............342.86%...............12..........................................$150.72

They even tell you in their commercials that their rates are high, but I don't think anyone expects 350%!

The 215% APR I posted was from their website, I'm not exactly sure what the going rate would be up here.

After this thread was posted I got a bit curious about these loans, I did a search and found a whole slew of these "short term/extremely high interest" companies, they are referred to as "payday loans", (loan me some money til payday). There are many different companies, not just American Indians, and they are perfectly legal. A lot of them have interest rates of over 300%. They say the reasoning behind the very high interest rate is that the term of the loan is short. For instance if you were to borrow $100 for only 14 days, your interest rate would be over 300% which sounds very overwhelming, but in reality the actual amount of money you would have to pay back at the end of the two weeks would only be $115.

This sorta thing makes me very happy that I have good credit.

[mawilson 2,133]

Nothing new.

Here's a couple of TV ads I saw a while back - 99.25% and 288%. I was so shocked, I had to pause and take a picture.

[X Factor 1,110]

It is not loansharking. They are operating within the rules of a deregulated financial market.

You mustn't worry. They create tons of jobs and eventually all that money will trickle down.

[rocks 494]

The 215% APR I posted was from their website, I'm not exactly sure what the going rate would be up here.

After this thread was posted I got a bit curious about these loans, I did a search and found a whole slew of these "short term/extremely high interest" companies, they are referred to as "payday loans", (loan me some money til payday). There are many different companies, not just American Indians, and they are perfectly legal. A lot of them have interest rates of over 300%. They say the reasoning behind the very high interest rate is that the term of the loan is short. For instance if you were to borrow $100 for only 14 days, your interest rate would be over 300% which sounds very overwhelming, but in reality the actual amount of money you would have to pay back at the end of the two weeks would only be $115.

This sorta thing makes me very happy that I have good credit.

Oh OK. I had to select my state on their website. That was the highest APR, and was the smallest loan. I figured maybe it was different in your state.

If someone needs a loan of $500, how are they going to afford 350% APR? It's a never ending cycle of constantly getting loans. Those payday loans are the same deal. Keeping the poor in debt. The casinos here are kind of like that too, promise big pay outs but I've never seen one.

[Teddy B 17,251]

Oh OK. I had to select my state on their website. That was the highest APR, and was the smallest loan. I figured maybe it was different in your state.

If someone needs a loan of $500, how are they going to afford 350% APR? It's a never ending cycle of constantly getting loans. Those payday loans are the same deal. Keeping the poor in debt. The casinos here are kind of like that too, promise big pay outs but I've never seen one.

It all boils down to how badly the person needs the cash. It is definitely a rip off, but there must be a lucrative market for these loans because there's a lot of companies giving them out.

[JohnR! 5,495]

It all boils down to how badly the person needs the cash. It is definitely a rip off, but there must be a lucrative market for these loans because there's a lot of companies giving them out.

And I am sure the default rate is astronomical...

However, the math is absolutely brilliant!

You need $500, so you make a loan for $850 and pays it off in $ 150 installments for 12 months!

In the end, you borrowed $500 and paid back $1,800.