Hacker News new | ask | show | jobs
by gbtw 1532 days ago
Can someone explain to me, i live in a country that doesn't have credit scores, limits loans rates to something sane, why you would use a predatory payment lender that will balloon? Seems like a very high risk gamble especially if you have the money and even higher gamble if you do not have the ability to pay a loan.
3 comments
thr0wawayf00 1532 days ago
The lending industry in the US is very powerful and regularly lobbies congress to reign in consumer protection action from government agencies like the Consumer Financial Protection Bureau, which often issue guidance to limit the offerings of many types of consumer lenders.

The sad truth is that looking poor in the US is culturally frowned upon, which often drives people to overextend their credit in order to fit in. People are quite often encouraged through advertising to improve their status through consumption in the short term at the expense of the long term. It's heinous, but that's America for you.

link
captainoats 1532 days ago
For people who have the money and plan these 0% interest short/medium term loans can be a good deal. However, like this story shows you have to evaluate the reputation of the company because problems can happen. Personally if I were the author I would have just repaid the final payment, waited for the chargeback reversal to put me in a positive balance situation, then worked with Affirm to get a refund. That obviously assumes you have the cash to cover remaking the final payment but that’s just another part of risk mitigation when taking on debt.
link
munk-a 1532 days ago
Well the good news in America is that you'll probably have to declare bankruptcy over medical bills by the time the loan actually comes due so... problem solved!

I really agree though, buy now pay later seems like a huge fiscal trap. Employment is at will and you have no guarantee about what tomorrow holds so it's good to try and live within your budget whenever possible... this doesn't really go for housing and the like though since those costs are so astronomical you're going to be gambling with debt no matter how long you save first.

link