8 ms·

Nothing boils my blood more than someone referring to all short term loans as "payday loans". Lendup is a fantastic company offering completely reasonable loans

Nothing boils my blood more than someone referring to all short term loans as "payday loans". Lendup is a fantastic company offering completely reasonable loans to customers with a strong need. There was an article bashing Uber for helping to advance pay for their drivers with Clearbanc in Pando this week too. Ridiculous.

mordocai 10y ago
Yeah, I hadn't heard about LendUp and went to go check it out. Definitely looks better than a payday loan.
geofft 10y ago
Clearbanc (http://motherboard.vice.com/en_ca/read/clearbanc-is-a-new-service-for-helping-uber-drivers-get-paid http://motherboard.vice.com/en_ca/read/clearbanc-is-a-new-se...) confuses me: why can't Uber pay their drivers immediately directly? What's in it for Clearbanc? If this is a regulatory runaround to effectively allow super-short pay periods for people who are on two-week pay schedules for some reason, sure. But it sounds like Lyft is doing this directly. Does Clearbanc get anything out of this, other than their $2/withdrawal cut? And what happens if a driver quits/gets dropped before their pay period actually happens?
- notahacker 10y ago
  Yeah, I'm very much in favour of companies partnering with third parties willing to offer short term advances against wages, but whichever way you dress it up, this is companies charging contractors to receive money they've already earned without an unnecessary delay. That can and should be subject to criticism.
revelation 10y ago
300+% APR. No, these are still payday loans, they just figured out you don't need to be quite as scummy to still make a ton of money.
- notahacker 10y ago
  To be honest, the likely default profile of the lenders means they're probably not making a ton of money on the average loan. But I'd also struggle to call a 396.29% APR[1] "completely reasonable", particularly not when you bear in mind the reason people are desperate to borrow $200 for a couple of weeks in the first place is because they're sufficiently poor for the $30 admin fee to represent a large percentage of their monthly income. [1]the default offer for short term loans using their "get your money now" widget
Someone1234 10y ago
But LendUp is a payday loan company. 369.69% APR for a 30 day loan is definitely within the realm. Or $28 for a $200 loan/30 days. Sorry but not seeing how they're different.
- ChuckMcM 10y ago
  This is exactly it. Now if LendUp would lend someone $200 for 30 days for a $1.50 (APR of 9%) they wouldn't be extortionate in their rates, but they would be leaving money on the table that they could be taking from people who really need a loan. And what lender ever likes to leave money on the table?
  - toomuchtodo 10y ago
    There's a fine line between a predatory payday lender and one that must charge high interest rates to absorb the above-average default rate of borrowers who need a short term loan. I don't know LendUp personally, but it seems like they're trying to be socially responsible.
    - mikestew 10y ago
      You originally said "completely reasonable loans". On which side of that fine line between predatory and reasonable do you feel a 369% APR falls?
      - toomuchtodo 10y ago
        The line is set by how long the note exists for. Two weeks? Reasonable. Rolled over every two weeks for a year? Unreasonable. The middle ground lies somewhere between. http://thehill.com/regulation/237538-borrowers-default-on-nearly-half-of-all-payday-loans-in-2-years-study-finds http://thehill.com/regulation/237538-borrowers-default-on-ne... > In studying payday loans in North Dakota, the Center for Responsible Lending found that nearly half of all borrowers default on a loan within their first two years of borrowing. At that default rate, you will not exist as a lender charging low interest rates.
devishard 10y ago
> Nothing boils my blood more than someone referring to all short term loans as "payday loans". Lendup is a fantastic company offering completely reasonable loans to customers with a strong need. LendUp is nothing of the sort. They're not at all different from a Payday Loan service, they just have better PR. Don't be so naive that you can't see past that even as far as to look at the rates at which they are lending.
- tommynicholas 10y ago
  Not naive, thanks for the advice though!
- askldfhjkasfhd 10y ago
  I disagree with your statement that they are not at all different from a payday loan service. Payday loan services' model is to roll over debt so you can never escape needing them. LendUp pretty clearly has a program in place (their "Ladder") that tries to help people get access to cheaper loans once they prove themselves creditworthy. And LU seems to genuinely want their customers to get fluent in money-talk so they can build their credit. I do see your point: from the outside, based entirely on the incontrovertible, objective facts (who they loan to, what rates they charge), they seem no different. However, I feel like their intention, their path, is one that will try to help people. It's the opposite of predatory, even if they do resemble their doppleganger mindset.
  - tommynicholas 10y ago
    They probably fit the technical definition of a "payday loan" but that's exactly my point - everyone has decided that anything that meets the categorical definition of a "payday loan" is inherently bad, no matter whether it is or not. The TRUTH is "predatory payday loans" and "payday loans" are different. People NEED payday loans, and we need to stop lenders from praying on that need. Lendup is doing it so, so right. Proud of that team every day!
    - askldfhjkasfhd 10y ago
marme 10y ago
the title on lendup's homepage is "LendUp: Payday Loan Alternative - Online Loans & Credit Cards 24/7"
duaneb 10y ago
> Nothing boils my blood more than someone referring to all short term loans as "payday loans". You must be into usury.
- JBReefer 10y ago
  Please don't be snarky and valid on hn

mordocai 10y ago

Yeah, I hadn't heard about LendUp and went to go check it out. Definitely looks better than a payday loan.

geofft 10y ago

Clearbanc (http://motherboard.vice.com/en_ca/read/clearbanc-is-a-new-service-for-helping-uber-drivers-get-paid http://motherboard.vice.com/en_ca/read/clearbanc-is-a-new-se...) confuses me: why can't Uber pay their drivers immediately directly? What's in it for Clearbanc? If this is a regulatory runaround to effectively allow super-short pay periods for people who are on two-week pay schedules for some reason, sure. But it sounds like Lyft is doing this directly. Does Clearbanc get anything out of this, other than their $2/withdrawal cut? And what happens if a driver quits/gets dropped before their pay period actually happens?

notahacker 10y ago
Yeah, I'm very much in favour of companies partnering with third parties willing to offer short term advances against wages, but whichever way you dress it up, this is companies charging contractors to receive money they've already earned without an unnecessary delay. That can and should be subject to criticism.

revelation 10y ago

300+% APR. No, these are still payday loans, they just figured out you don't need to be quite as scummy to still make a ton of money.

notahacker 10y ago
To be honest, the likely default profile of the lenders means they're probably not making a ton of money on the average loan. But I'd also struggle to call a 396.29% APR[1] "completely reasonable", particularly not when you bear in mind the reason people are desperate to borrow $200 for a couple of weeks in the first place is because they're sufficiently poor for the $30 admin fee to represent a large percentage of their monthly income. [1]the default offer for short term loans using their "get your money now" widget

Someone1234 10y ago

But LendUp is a payday loan company. 369.69% APR for a 30 day loan is definitely within the realm. Or $28 for a $200 loan/30 days. Sorry but not seeing how they're different.

ChuckMcM 10y ago
This is exactly it. Now if LendUp would lend someone $200 for 30 days for a $1.50 (APR of 9%) they wouldn't be extortionate in their rates, but they would be leaving money on the table that they could be taking from people who really need a loan. And what lender ever likes to leave money on the table?
- toomuchtodo 10y ago
  There's a fine line between a predatory payday lender and one that must charge high interest rates to absorb the above-average default rate of borrowers who need a short term loan. I don't know LendUp personally, but it seems like they're trying to be socially responsible.
  - mikestew 10y ago
    You originally said "completely reasonable loans". On which side of that fine line between predatory and reasonable do you feel a 369% APR falls?
    - toomuchtodo 10y ago
      The line is set by how long the note exists for. Two weeks? Reasonable. Rolled over every two weeks for a year? Unreasonable. The middle ground lies somewhere between. http://thehill.com/regulation/237538-borrowers-default-on-nearly-half-of-all-payday-loans-in-2-years-study-finds http://thehill.com/regulation/237538-borrowers-default-on-ne... > In studying payday loans in North Dakota, the Center for Responsible Lending found that nearly half of all borrowers default on a loan within their first two years of borrowing. At that default rate, you will not exist as a lender charging low interest rates.

devishard 10y ago

> Nothing boils my blood more than someone referring to all short term loans as "payday loans". Lendup is a fantastic company offering completely reasonable loans to customers with a strong need. LendUp is nothing of the sort. They're not at all different from a Payday Loan service, they just have better PR. Don't be so naive that you can't see past that even as far as to look at the rates at which they are lending.

tommynicholas 10y ago
Not naive, thanks for the advice though!
askldfhjkasfhd 10y ago
I disagree with your statement that they are not at all different from a payday loan service. Payday loan services' model is to roll over debt so you can never escape needing them. LendUp pretty clearly has a program in place (their "Ladder") that tries to help people get access to cheaper loans once they prove themselves creditworthy. And LU seems to genuinely want their customers to get fluent in money-talk so they can build their credit. I do see your point: from the outside, based entirely on the incontrovertible, objective facts (who they loan to, what rates they charge), they seem no different. However, I feel like their intention, their path, is one that will try to help people. It's the opposite of predatory, even if they do resemble their doppleganger mindset.
- tommynicholas 10y ago
  They probably fit the technical definition of a "payday loan" but that's exactly my point - everyone has decided that anything that meets the categorical definition of a "payday loan" is inherently bad, no matter whether it is or not. The TRUTH is "predatory payday loans" and "payday loans" are different. People NEED payday loans, and we need to stop lenders from praying on that need. Lendup is doing it so, so right. Proud of that team every day!
  - askldfhjkasfhd 10y ago

marme 10y ago

the title on lendup's homepage is "LendUp: Payday Loan Alternative - Online Loans & Credit Cards 24/7"

duaneb 10y ago

> Nothing boils my blood more than someone referring to all short term loans as "payday loans". You must be into usury.

JBReefer 10y ago
Please don't be snarky and valid on hn