If you’ve watched television late at night, as I do when I’m trying to come up with things to write about here on Consumerism Commentary, you might come across Gary Coleman pitching cash loans. Here’s the commercial I keep seeing (embedded video). If you can’t see it, here’s the direct link.
Arnold’s talkin’ ’bout CashCall, which provides immediate cash loans in states where they are legal. These aren’t quite “payday loans,” which are expected to be fully paid back within a couple of weeks. These are long term loans, and if payments are made monthly, they would extend four or eight years. Look at these ridiculous rates. As a resident of New Jersey, I would not “qualify” for a loan, but here is what I would be paying if I lived in Pennsylvania and qualified for these loans.
What the website doesn’t tell you is how much money you’ll actually pay for the “benefit” of immediate cash, including the $75 origination fee. Their chart should look more like this, but then maybe people would not be nearly as interested in these products.
Desperate times call for desperate measures. Gary Coleman is living proof of that adage. All the more reason to cover yourself by having a stash of accessible cash or highly liquid savings — or at least, available credit — for emergencies.
By the way, the situation is worse if you live in Nevada.
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{ 6 comments… read them below or add one }
I recently had a discuss with some friends about how we should start a loan sharking business. The returns sound great because most people wouldn’t pay off the loans on time and the interest alone would be considerable. But I thought about the moral implications of making someone akin to an indentured servant and I just couldn’t do it.
Wow! Seeing all the numbers lined up really brings it home. A 7 year loan for $5k and you end up paying over $21k. Incredible.
Dy, try Prosper.com. It’s not as usurious as loan sharking, but still beats a high yield savings account. :-D
I’ve had junk mail advertising loans with 147% APR. In my case, I think they actually are loan sharks with a letterhead.
Wow! I’ve always known that those rates had to be awful, but I never realized how awful they were. It’s a shame we live in a culture where people probably get these loans for the large screen TV they need RIGHT NOW, not realizing it will cost them 4 times as much.
Paying almost 4 years on a 1,000 loan. No thanks.
By the way, I have seen that commercial and we all know Gary is broke.
I have to hand it to him, he still trys to make a quick buck here and there.