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Old September 18th, 2012, 05:16 PM
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Angry This should be illegal!!

I don't usually post non-cruise related stuff, but in this case I'll make an exception.

Want to talk about something that should definitely be illegal? Check out this loan company!

Western Sky

I saw their advertisement on TV the other night and I could not believe what I was seeing!

Interest rates as high as 342.86%!!

Guess how they get away with it? It's owned by a ONE Native American who is located on an Indian Reservation!! It's not even a company; just one person. And because he's on an Indian Reservation, he doesn't have to abide by the same laws the rest of us do. So he can advertise on TV trying to get some poor schmuck to borrow money from a loan shark.

Are you kidding me???

Pete
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Old September 18th, 2012, 05:45 PM
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Although not probably quite that high, exorbitant fees are not only found on Indian Reservations.

In some states, Car Title Loans have both interest and fees that can total up to and maybe beyond 250%.

Some states I think have made such loans and fees illegal. Others haven't. Since in some states, the finance percentage a business can charge may be controlled, they get you with "fees."

Sadly, it's not as unusual as you think. Matter of fact, a lot of these outfits are found outside of military bases where they stick it to the GI's who often don't make enough to support their families so they turn to such outfits.

Then, of course, there are those who are just plain stupid.

As the phrase goes, "Caveat Emptor!"
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Old September 18th, 2012, 05:45 PM
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Who cares what interest he charges?

The fool is the guy who pays that rate, not the one who asks for it.
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Old September 18th, 2012, 06:18 PM
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I hear what you're saying about others demanding high interest rates, especially outside of military installations. I was in the Navy for 6 years and there were always those guys wanting to take advantage of underpaid servicemen and women.

And I agree that it's a fool who falls for this stuff, but it's usually those people who can least afford it who get suckered into this and therein lies the sad part.

Perhaps I'm being naive, but I thought there were laws everywhere setting limits on interest rates. I guess, as you said, some states do, while others don't. And I know some charge some pretty hefty interest rates, but to openly advertise on TV with such outrageous rates? I just feel sorry for those people who get taken advantage of by people like this simply because they don't know any better. I understand it's 'buyer beware', but it still doesn't make it right.

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Old September 18th, 2012, 06:54 PM
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Cruise Planner,

You're absolutely correct when you say it's not fair and your just as correct when you say that those who can least afford to avail themselves of these rip offs are those who do.

Personally, I don't know how these folks can sleep at night. I could never take such advantage of someone like this regardless of their income.

Two wrongs don't make a right.
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Old September 18th, 2012, 06:58 PM
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Unfortunately, as they saying goes, there's a sucker born every minute.

Too bad the sucker can't sucker punch these type of 'bottom feeders'. After all, turnabout is only fair play.
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Old September 18th, 2012, 06:59 PM
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I like your outlook.
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Old September 18th, 2012, 07:34 PM
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In fact usury is a crime in many places (excessively high interest rates) and I think it should be. Far too many people get taken in my people willing to give credit.

Heck, my sister lost her house to a bank. Now no one twisted her arm, but she (stupidly?) believed the appraisers who told her her house was worth what they were willing to give her a loan for.

So - it isn't just about interest rates - there are predatory loan makers who will give you low rates - but take your home if you can't pay them back.
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Old September 19th, 2012, 04:00 AM
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Quote:
Originally Posted by Paul Motter View Post
In fact usury is a crime in many places (excessively high interest rates) and I think it should be. Far too many people get taken in my people willing to give credit.

Heck, my sister lost her house to a bank. Now no one twisted her arm, but she (stupidly?) believed the appraisers who told her her house was worth what they were willing to give her a loan for.

So - it isn't just about interest rates - there are predatory loan makers who will give you low rates - but take your home if you can't pay them back.
I really wouldn't label a person or bank as "Predatory" if they give you a reasonable loan; you can't pay them back and then they take your house. The house is the collateral for the loan.

If they don't fully disclose or bury the terms of the loan then it's a different story.

I have some sympathy for people who have been caught up in the easy money, inflated appraisals and confusing terms of a loan but the end result has always been. If it's too good to be true it: It is.

Take care,
Mike
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Old September 19th, 2012, 05:28 AM
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The way these lenders work is the rate is low if you pay it off on the agreed terms. Usually the term is for 1 or 2 weeks for these payday loan sharks. Where people get in trouble is that they don't pay it off in that time and with a interest rate at 250% the charges add up quickly making it hard to pay the loan back.
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Old September 19th, 2012, 11:01 PM
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Dishonest Indians Tribes like this one, piss me off. Because they use their sovereign nation status to rip off not only innocent people but also the government be not paying their for sure of taxes. Before someone whines about them being their own community. I say then fine don't use a single government service paid by my tax dollars and that includes the Federal highways, welfare, State Disability Insurance, Unemployment insurance etc. If any member of an Indian tribe or an Indian tribe employer wants to use these services then paid your fair share because my broke butt can't afford to carry you anymore.

For more on Sovereign nation status look at this. http://www.namsinc.org/pdf/Soverign%...0paper%202.pdf
Here is part of the PDF explaining Sovereign nations.
Quote:
Tribal governments have self-governance powers that include: the right to form their own government; the
power to make and enforce both civil and criminal laws; the power to tax; the power to establish membership; the
right to license, zone and regulate activities; the power to engage in commercial activity; and the power to exclude
persons (Indian and non-Indian) from tribal territories.
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Old September 24th, 2012, 06:09 AM
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Some people may not be as smart as others, but in a civilized society, we should have some laws to protect people from loan sharks.

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Old September 24th, 2012, 09:19 AM
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Those people who take the loans from the lone Indian have no money and never will. They have been taken advantage in the past and will be taken advantage of in the future.

A possible solution is a basic economics course taught in high school on how to manage money. From balancing a checkbook (which many don't) to understanding compound interest to a fundamental explanation of the stock market for their future self-directed retirement accounts (IRAs, Roth IRAs, 401k, etc).

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Old September 24th, 2012, 09:55 AM
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Oh, Old Fart,
What you say is so true, I try to only spend what I can pay for. I do use credit cards, but pay off the balance when it is due, and life within my means. I was taught early how to save/spend $....It is pretty basic...
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Old September 24th, 2012, 12:22 PM
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I agree wholeheartedly, OFC!!!

Should be mandatory for every high school student to take a class on how to manage your money, budgeting, balancing your accounts, planning for retirement, etc, etc.

For the most part, I don't think kids nowadays have any understanding of financial management.

Pete
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Old September 24th, 2012, 12:58 PM
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Economics is a required high school class and has been for a while. However, Economics taught in High School is not that same as what you are talking about. Economics is supply and demand, opportunity costs and Scarcity and has more to do with how to run a business instead of a household.

I agree that high school students should receive a basic personal finance class. Including all the things old fart cruiser talked about.

But I would also show the students how to use the template in excel to amortize loans before they make large purchases. Like car loans and home loans. In my office I have ran that sheets for co-worker sand showed them the amount of Interest they save just making an extra $100 payment per month on a 30 year home loan.

Example: 30 year fixed at 5% for $200,000 your total interest is $186,511.57 and it takes 360 months to pay it off.

If you make an additional $100 payment per month the interest paid goes down to $149,442.54 and you pay off in 298 months.

So making the extra payments saves you $37,069.03 in interest and shaves over 5 years off the time of the loan. That is what I would teach in school.

I would also explain a what a FICO Score is and how it impact your credit has on your ability to get a loan at a decent interest rate. BTW it took me 5 minutes or less to amortize a $200K loan in excel with both the normal and extra payments. The template is simple to use most people don't know it's there.
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Old September 25th, 2012, 12:12 AM
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Quote:
Originally Posted by katlady View Post
Economics is a required high school class and has been for a while. However, Economics taught in High School is not that same as what you are talking about. Economics is supply and demand, opportunity costs and Scarcity and has more to do with how to run a business instead of a household.

I agree that high school students should receive a basic personal finance class. Including all the things old fart cruiser talked about.

But I would also show the students how to use the template in excel to amortize loans before they make large purchases.
katlady,
I should have said, "personal finance, instead of economics.

Showing student where to find templates on the internet is not teaching, it is OK to show coworkers. Back in a previous life when I was designing bridges, I would not allow new employees to design using a computer until he/she did it 1st long hand. That was when computers were in their infancy and I could do it as fast w/my sliderule LL.

The same goes for a high school personal finance course. They have to get an understanding of where the numbers come from. They probably seen the formulii in algebra class and this puts an application to the formula. Then allow them to do the problem on a blank computer spreadsheet before showing them the template.

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Old September 25th, 2012, 06:15 AM
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Don't you wish kids were taught basic financial skills in school?
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Old September 25th, 2012, 06:25 AM
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Don't know about anyone else, but I'm actually stunned at what our children are not being taught or told, stuff I and many others consider are absolutely basic!
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Old September 25th, 2012, 12:04 PM
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Quote:
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katlady,
I should have said, "personal finance, instead of economics.

Showing student where to find templates on the internet is not teaching, it is OK to show coworkers. Back in a previous life when I was designing bridges, I would not allow new employees to design using a computer until he/she did it 1st long hand. That was when computers were in their infancy and I could do it as fast w/my sliderule LL.

The same goes for a high school personal finance course. They have to get an understanding of where the numbers come from. They probably seen the formulii in algebra class and this puts an application to the formula. Then allow them to do the problem on a blank computer spreadsheet before showing them the template.

O F c'er
You have a good point, that teacher would do well to show the student how to manually do an amortization table first. Then show them the Excel template. However, they should get training on excel because in the job market now days no one is doing Loan Amortization tables by hand (it's a waste of time) and experience in Excel is important. It's also important to know that Excel using formulas so and understand of math and finance is needed to use Excel. After the first few lines an amortization table the formula just repeats itself.

The important part of that lesson would be explaining now compounding interest works. I understand wanting to show student the math and skills behind computers. But a strong understanding of excel and other computer programs is very imporatant in today's job market.

Speaking of Compounding interest I believe students also need to understand what Annual Precentage Rate (APR) is and how it changes depending on how a loan is compounded. This website explains things pretty clearly. http://www.howtocalculateapr.com/
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