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Your analogy with drug dealing is quite apt. Because what happens when people can't get what they want through legal channels? Black market. Loansharking. Broke

by gcheong 16y ago

Your analogy with drug dealing is quite apt. Because what happens when people can't get what they want through legal channels? Black market. Loansharking. Broken kneecaps. Payday loans may seem to reflect the worst of our society but in actuality they are a step up from other alternatives.

tptacek 16y ago
Your argument is that loansharking would be just as prevalent as payday loans, once payday loans are outlawed? You can get a payday loan within walking distance of most every block in the city of Chicago. You can't even legally be a loan shark.
- gcheong 16y ago
  I don't know if it would be just as prevalent, maybe not but I don't think the criminals are going to pass up a proven market opportunity so I think loansharking would increase from where it is now. I do think that for the people who use payday loans today, if they didn't have the option legally, then life for them could be worse overall either by having to deal with loansharks and/or because they end up in some pit that could have been avoided if they had the legal loan option.
andrewljohnson 16y ago
Can you comment on my second argument? These companies know that XX% (not .XX%) will default. They intentionally drive some customers in debt, and then profit on the rest. This isn't providing loans for people in need... this is intentional destruction of people's lives and credit. There is a spreadsheet in ZestCash HQ with some truly despicable calculations in it.
- Dylanlacey 16y ago
  That's a farcical argument. X% of people will also default on their home-loans. Ergo, no-one should offer them. X% of people will default on service payments. X% of people will never claim on their insurance. X% of your customers will never go from 'trial' to 'customer'. Every business requires examination of the risks and amortization via the costs. So yes, some of their clients will go bankrupt. The rest will be charged high fees. And the pay day loaner? They will make a moderate amount of money, because they DON'T GET BACK THE DEFAULTED LOANS. They're not taking someone's house when they don't pay back, they're just losing their loan amount entirely.

by gcheong 16y ago

tptacek 16y ago

Your argument is that loansharking would be just as prevalent as payday loans, once payday loans are outlawed? You can get a payday loan within walking distance of most every block in the city of Chicago. You can't even legally be a loan shark.

gcheong 16y ago
I don't know if it would be just as prevalent, maybe not but I don't think the criminals are going to pass up a proven market opportunity so I think loansharking would increase from where it is now. I do think that for the people who use payday loans today, if they didn't have the option legally, then life for them could be worse overall either by having to deal with loansharks and/or because they end up in some pit that could have been avoided if they had the legal loan option.

andrewljohnson 16y ago

Can you comment on my second argument? These companies know that XX% (not .XX%) will default. They intentionally drive some customers in debt, and then profit on the rest. This isn't providing loans for people in need... this is intentional destruction of people's lives and credit. There is a spreadsheet in ZestCash HQ with some truly despicable calculations in it.

Dylanlacey 16y ago
That's a farcical argument. X% of people will also default on their home-loans. Ergo, no-one should offer them. X% of people will default on service payments. X% of people will never claim on their insurance. X% of your customers will never go from 'trial' to 'customer'. Every business requires examination of the risks and amortization via the costs. So yes, some of their clients will go bankrupt. The rest will be charged high fees. And the pay day loaner? They will make a moderate amount of money, because they DON'T GET BACK THE DEFAULTED LOANS. They're not taking someone's house when they don't pay back, they're just losing their loan amount entirely.