No, that isn’t a typo, and I didn’t put the decimal place in the wrong spot.
A co-worker came in talking about this infomercial with Gary Coleman pitching 99.25% APR loans. I thought to myself, no, can’t be. So I threw “99.25% APR” into google, and what do you know.
So for their “typical loan of $2600 for 42 months @ 216.55/month” (that’s their words, not mine), you’d only have to pay back $9095.10.
You can get a deal though if you borrow more. They’ll drop it down to 59.95% APR for a $5075 loan, but push the payments out to 84 months. You’d end up spending $21338.52 paying back that $5075 loan.
That’s exactly what we though. We’ve got tons of experience with banking regulation stuff here at work, and none of us can figure out how they can do this legally.
Interesting fine print here:
“Loans made to residents of California, Idaho, Nevada, New Mexico, and Utah will be underwritten and funded by CashCall. Loans made to residents of all other states (excluding Iowa, Massachusetts, Minnesota, New Jersey, New York, West Virginia and Wisconsin) will be underwritten and funded by First Bank of Delaware (Member FDIC).”
So they don’t give loans in NY and some other states at all, and in some states they have to personally float the loan.
They’re classified as pay-day advances so they don’t fit under typical usury laws…I fucking love this industry it’s taken all the heat of my industry
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By law you can only advertise pay-day advances as a fee, not a loan rate. Once you attach a rate it’s not longer a pay-day advance.
We looked into this when we wrote our courtesy pay module for our credit union software. Some CU’s wanted to charge their members a rate instead of a flat fee, but we couldn’t legally add that feature.