# 99.25% interest PLUS $75 application fee? **URL:** \ **Category:** In My Humble Opinion\ **Created:** [June 13, 2008, 9:36pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861 "2008-06-13T21:36:07Z")\ **Posts on this page:** 20\ **Page:** 1
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 13, 2008, 9:36pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/1 "2008-06-13T21:36:07Z")
I just saw an ad on tv for a company that says “we trust you!” when it comes to lending money. AT 99.25% interest plus $75 application fee! HOLY SH!T, why would you borrow from these people? Even payday loans are a cheaper percentage. SCARY. ---
**Author:** ![Santo\_Rugger](https://avatars.discourse-cdn.com/v4/letter/s/e95f7d/32.png) [@Santo\_Rugger](https://boards.straightdope.com/u/Santo_Rugger)\ **Post date:** [June 13, 2008, 9:49pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/2 "2008-06-13T21:49:39Z")
[QUOTE=FourPaws] I just saw an ad on tv for a company that says “we trust you!” when it comes to lending money. AT 99.25% interest plus $75 application fee! HOLY SH!T, why would you borrow from these people?\*\* Even payday loans are a cheaper percentage. \*\* SCARY. [/QUOTE] Not really: [QUOTE=Wiki] Typical loans are between $100 and $500 and are due in two weeks, with interest rates of up to 400% APR. On a two-week loan, fees average $15 for each $100 lent. [/QUOTE] > **[Payday loan](https://en.wikipedia.org/wiki/Payday_loan)** > > This is an accepted version of this page > A payday loan is a short-term unsecured loan, often characterized by high interest rates. These loans are typically designed to cover immediate financial needs and are intended to be repaid on the borrower's next payday. > The term "payday" in payday loan refers to when a borrower writes a postdated check to the lender for the payday salary, but receives part of that payday sum in immediate cash from the lender. However, in common parlance, the concept al... ---
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 14, 2008, 5:02pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/3 "2008-06-14T17:02:04Z")
[QUOTE=Santo Rugger] Not really:[Payday loan - Wikipedia](http://en.wikipedia.org/wiki/Payday_loan) [/QUOTE] Yes, but payday loans, as you mentioned, are short term. This was advertising $2650 for 42 mos at 99.25% plus $75 fee, which basically makes it a total of 100%. Payday loans, while the rates are high, are short term. Taking this loan to the full 42 mos would be ridiculous, hence my question. ---
**Author:** ![gaffa](https://avatars.discourse-cdn.com/v4/letter/g/e68b1a/32.png) [@gaffa](https://boards.straightdope.com/u/gaffa)\ **Post date:** [June 15, 2008, 3:46am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/4 "2008-06-15T03:46:16Z")
Sure, but while payday loans are advertised as being short term, the people who use them frequently are unable to pay them off when they are supposed to. So they pay off a portion, the very high interest keeps going on and they wind up paying that 400%. The mafia didn’t cheat people this much! ---
**Author:** ![LiveOnAPlane](https://avatars.discourse-cdn.com/v4/letter/l/3d9bf3/32.png) [@LiveOnAPlane](https://boards.straightdope.com/u/LiveOnAPlane)\ **Post date:** [June 16, 2008, 2:22am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/5 "2008-06-16T02:22:46Z")
Funny you mentioned this. Last week, my niece and I were watching the very same ad. And my reaction (and hers) was just almost the same as yours, “HOLY SHIT.” However, if I am remembering the ad correctly, did they not say that “We trust you?” That’s gotta be worth something. Other However (and hoping I don’t get banned for this), if you will just send me $25 USD, I will tell you over the phone and in an email, that I not only trust you, but I think you a really swell person to boot. Just one easy payment! And you are beautiful, you know you are. ---
**Author:** ![Kinthalis](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/kinthalis/32/16084_2.png) [@Kinthalis](https://boards.straightdope.com/u/Kinthalis)\ **Post date:** [June 16, 2008, 11:15am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/6 "2008-06-16T11:15:56Z")
Don’t these things run foul of loan shark laws? How do they not? ---
**Author:** ![zagloba](https://avatars.discourse-cdn.com/v4/letter/z/977dab/32.png) [@zagloba](https://boards.straightdope.com/u/zagloba)\ **Post date:** [June 16, 2008, 11:42am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/7 "2008-06-16T11:42:01Z")
Is this [cashcall.com](http://cashcall.com) we’re talking about? The ads ran for months saying they’d loan you money on your signature alone without any mention of fees or interest whatsoever. The website didn’t give you any of this information either. Presumably if you called them to initiate the application process you’d eventually find out – whether before or after you signed the contract I don’t know. At some point the regulators must have leaned on them because their ads at least hint at their outrageous interest rates. ---
**Author:** ![Tapioca\_Dextrin](https://avatars.discourse-cdn.com/v4/letter/t/3d9bf3/32.png) [@Tapioca\_Dextrin](https://boards.straightdope.com/u/Tapioca_Dextrin)\ **Post date:** [June 16, 2008, 11:51am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/8 "2008-06-16T11:51:26Z")
[QUOTE=zagloba] Is this [cashcall.com](http://cashcall.com) we’re talking about? [/QUOTE] Looks like it. From their webshite ```auto Loan Product Borrower Proceeds Loan Fee APR Number of Payments Payment Amount $10,000 Loan* $9,925 $75 29.26% 120 $256.26 $5,075 Loan $5,000 $75 70.08% 84 $294.50 $2,600 Loan $2,525 $75 99.25% 42 $216.55 $1,500 Loan $1,000 $500 141.42% 12 $159.83 ``` ---
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 16, 2008, 12:05pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/9 "2008-06-16T12:05:47Z")
[QUOTE=zagloba] Is this [cashcall.com](http://cashcall.com) we’re talking about? The ads ran for months saying they’d loan you money on your signature alone without any mention of fees or interest whatsoever. The website didn’t give you any of this information either. Presumably if you called them to initiate the application process you’d eventually find out – whether before or after you signed the contract I don’t know. At some point the regulators must have leaned on them because their ads at least hint at their outrageous interest rates. [/QUOTE] I am refraining from posting any other details as I didn’t want it to been seen as promotion a website - but then again, saying “HOLY SH!T!” about their interest rates could hardly be seen as a promotion. ---
**Author:** ![iamthewalrus\_3](https://avatars.discourse-cdn.com/v4/letter/i/258eb7/32.png) [@iamthewalrus\_3](https://boards.straightdope.com/u/iamthewalrus_3)\ **Post date:** [June 16, 2008, 9:18pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/10 "2008-06-16T21:18:28Z")
[QUOTE=Kinthalis] Don’t these things run foul of loan shark laws? How do they not? [/QUOTE] Many states no longer have such laws. And the way that works in these United States is that the bank only has to play by the laws of the state it has a physical presence in. That’s why all the credit card companies are in South Dakota and Maryland. Those were the first states to drop their usury laws. ---
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 17, 2008, 9:27am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/11 "2008-06-17T09:27:17Z")
[QUOTE=iamthewalrus(:3=] Many states no longer have such laws. And the way that works in these United States is that the bank only has to play by the laws of the state it has a physical presence in. That’s why all the credit card companies are in South Dakota and Maryland. Those were the first states to drop their usury laws. [/QUOTE] You forgot Delaware. ---
**Author:** ![Czarcasm](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/czarcasm/32/4050_2.png) [@Czarcasm](https://boards.straightdope.com/u/Czarcasm)\ **Post date:** [June 17, 2008, 11:38am UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/12 "2008-06-17T11:38:21Z")
[QUOTE=FourPaws] I am refraining from posting any other details as I didn’t want it to been seen as promotion a website - but then again, saying “HOLY SH!T!” about their interest rates could hardly be seen as a promotion. [/QUOTE] It still seems a little ambiguous to me, like “HOLY SH!T! THAT WAS THE BEST SEX I EVER HAD WITH MORE THAN FIVE PEOPLE AT A TIME!!” I think “WHAT THE SUMBITCHIN’ FUCK!!!” might have clarified things, imho. ---
**Author:** ![Inigo\_Montoya](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/inigo_montoya/32/124_2.png) [@Inigo\_Montoya](https://boards.straightdope.com/u/Inigo_Montoya)\ **Post date:** [June 17, 2008, 1:36pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/13 "2008-06-17T13:36:40Z")
[QUOTE=Czarcasm] It still seems a little ambiguous to me, like “HOLY SH!T! THAT WAS THE BEST SEX I EVER HAD WITH MORE THAN FIVE PEOPLE AT A TIME!!” I think “WHAT THE SUMBITCHIN’ FUCK!!!” might have clarified things, imho. [/QUOTE] Hey, keep that kind of talk in the pit or I’ll … oh. ---
**Author:** ![Tristan](https://sea3.discourse-cdn.com/straightdope/user_avatar/boards.straightdope.com/tristan/32/18058_2.png) [@Tristan](https://boards.straightdope.com/u/Tristan)\ **Post date:** [June 17, 2008, 3:04pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/14 "2008-06-17T15:04:41Z")
[QUOTE=Tapioca Dextrin] Looks like it. From their webshite ```auto Loan Product Borrower Proceeds Loan Fee APR Number of Payments Payment Amount $10,000 Loan* $9,925 $75 29.26% 120 $256.26 $5,075 Loan $5,000 $75 70.08% 84 $294.50 $2,600 Loan $2,525 $75 99.25% 42 $216.55 $1,500 Loan $1,000 $500 141.42% 12 $159.83 ``` [/QUOTE] It seems as if they have altered their ways a bit. I got a CashCall loan a while back. They make their money off idiots like me, who think that they don’t have any other options. Not great credit, needing to move in a hurry… Back when I got it (2003, I think) they were still basing the interest rate on your credit score, at least a little. So I got a $5000 loan at 59% interest. After a year of $250 payments (less than a dollar of which went to the principal), I altered my due date by about a week. This changed the amount of interest that gained on my overall loan, and when I paid it off in 2006 (via a bank loan, at a much better interest rate) I owed $5120 or so. For those paying attention at home, that was $9000 paid on a $5000 loan, with $5000 still owed. I tell everyone I know that CashCall is to be avoided at all costs. It’s just not worth it. ---
**Author:** ![Cisco](https://avatars.discourse-cdn.com/v4/letter/c/ccd318/32.png) [@Cisco](https://boards.straightdope.com/u/Cisco)\ **Post date:** [June 17, 2008, 3:12pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/15 "2008-06-17T15:12:01Z")
I wonder what kind of fucked up logic some silver-tongued lobbyist used to get those states to drop their usury laws. ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [June 17, 2008, 4:20pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/16 "2008-06-17T16:20:40Z")
[QUOTE=Cisco] I wonder what kind of fucked up logic some silver-tongued lobbyist used to get those states to drop their usury laws. [/QUOTE] There really is no justification for usury laws in my mind. If someone wants to borrow money and someone else wants to loan them money, then why is that the government’s business? Those two are taking the risks. Yes, some people must borrow money at a very high interest rate. Lenders who offer this rate do so because the people to whom they are loaning have bad credit, are much more likely to simply not pay the loan back, or have some sort of other financial difficulties. You may say that these people don’t deserve to borrow money. The paternalistic notion that you get to determine who is “worthy” to buy some good or service is something I reject. If you think you need the money and someone is willing to lend it to you, then do what you think is best for you. As long as you know the terms of the transaction then you can do what you want. But it should be noted that both borrowers and lenders take a risk here. The default rate for these high-interest loans are far higher than conventional loans. And it’s not like many of the people borrowing this money have any assets that borrowers can go after to recover their money. The relatively low profit margins of payday lenders, for instance, illustrates that these high interest rates are necessary to cover their overhead. And borrowers, of course, face the prospect of paying back more money than they borrowed if they aren’t careful. ---
**Author:** ![ralph124c](https://avatars.discourse-cdn.com/v4/letter/r/8797f3/32.png) [@ralph124c](https://boards.straightdope.com/u/ralph124c)\ **Post date:** [June 17, 2008, 4:53pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/17 "2008-06-17T16:53:51Z")
only 20%/week (“six for five”). Sounds like a deal! ---
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 17, 2008, 5:09pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/18 "2008-06-17T17:09:30Z")
[QUOTE=Renob] There really is no justification for usury laws in my mind. If someone wants to borrow money and someone else wants to loan them money, then why is that the government’s business? Those two are taking the risks. Yes, some people must borrow money at a very high interest rate. Lenders who offer this rate do so because the people to whom they are loaning have bad credit, are much more likely to simply not pay the loan back, or have some sort of other financial difficulties. [/QUOTE] It’s called predatory lending. That’s why with a mortgage refinance you have a three day right to recind - so you can think it over and make sure its a good idea and not be pressured into it by lenders. Yes, I know this is not a mortgage, thank you. I’m just saying that mortgage or no mortgage, it’s predatory, and their should be laws to prevent it. ---
**Author:** ![FourPaws](https://avatars.discourse-cdn.com/v4/letter/f/e0b2c6/32.png) [@FourPaws](https://boards.straightdope.com/u/FourPaws)\ **Post date:** [June 17, 2008, 5:12pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/19 "2008-06-17T17:12:58Z")
[QUOTE=Czarcasm] It still seems a little ambiguous to me, like “HOLY SH!T! THAT WAS THE BEST SEX I EVER HAD WITH MORE THAN FIVE PEOPLE AT A TIME!!” I think “WHAT THE SUMBITCHIN’ FUCK!!!” might have clarified things, imho. [/QUOTE] Would just “SUMB!TCH!” have worked better for you, then? Or “WALTER TANGO FOXTROT! SUMB!TCH!” have been better? I thought with the prasing it couldn’t have been taken in a positive light - but if you think 99.25% interest with a $75 application fee is a deal, then I suppose you could have viewed it as “HOLY SH!T! WHAT A K!CKASS DEAL!” ---
**Author:** ![Renob](https://avatars.discourse-cdn.com/v4/letter/r/8c91f0/32.png) [@Renob](https://boards.straightdope.com/u/Renob)\ **Post date:** [June 17, 2008, 5:13pm UTC](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861/20 "2008-06-17T17:13:16Z")
[QUOTE=FourPaws] It’s called predatory lending. [/quote] Yes, some people call it that. However, some people call feminists “feminazis.” Just because some people apply a derogatory term to something doesn’t make that thing bad. > [@](#): > > That’s why with a mortgage refinance you have a three day right to recind - so you can think it over and make sure its a good idea and not be pressured into it by lenders. > > Yes, I know this is not a mortgage, thank you. I’m just saying that mortgage or no mortgage, it’s predatory, and their should be laws to prevent it. How is it “predatory”? Someone takes a loan without compulsion, fully knowing the terms of the loan. [Next page](https://boards.straightdope.com/t/99-25-interest-plus-75-application-fee/452861.md?page=2)