Dilemma

[Winston]

He should.

[JohnT]

Originally posted by Winston
Assuming he has even thought along those lines. They were options mentioned by other posters, not by Spec as coming from the guy in need of the cash.

Speculation, sure. But that's all we've got, since we don't know the guy, and apparently neither does Spec. But there's a lot of money to be made here on the back of someone else's misfortune and thoughtlessness, so who cares! Plus you get to appear "kind".

Uh, if that's what you're thinking while reading this thread, you might want to brush up on those English lessons, pal.

The reason why we're suggesting against it is not because the interest rate is too low, it's that the risk is too high, especially given the collateral offered.

It also does nothing to ameliorate the larger problem, that of the gamblers gambling problem. It also involves Spec in a problem that is not his own... well, it is now.

[JohnT]

That was money Spec could've used to come to ApolyCon!

[Winston]

Don't berate me on my English capabilities, I realise full well what your objections are.

[JohnT]

You didn't answer my question, Winston: what rate of interest do you charge a junkie for a $10,000 loan that will get paid to his pusher?

[Jon Miller]

um, 15% isn't bad at all

is better than my credit cards

JM

[Winston]

I don't lend money out, but if I were to, and had the security of getting the car upon non-fulfilment, assuming the realisation value of it is accurate, 7% p.a. Not that I see the relevance of what I would do.

[Kontiki]

As someone who has done enough loans in the past, I can tell you that A) automobiles are considered terrible collateral and B) the typical rate of interest for a "lender of last resort" (places like TransCanada Credit in Canada) is in the 30% neighbourhood.

[Kontiki]

Originally posted by Winston
I don't lend money out, but if I were to, and had the security of getting the car upon non-fulfilment, 7% p.a. Not that I see the relevance of what I would do.

The Canadian prime rate is currently 5.5%. A P+1.5% loan is a pretty good rate for a preferred customer of a major financial institution. You'd make a brutal banker.

[JohnT]

Originally posted by Winston
I don't lend money out, but if I were to, and had the security of getting the car upon non-fulfilment, assuming the realisation value of it is accurate, 7% p.a. Not that I see the relevance of what I would do.

What you would do is quite relevant when you argue against what others are doing.

[Winston]

If you're allegedly trying to "help someone out", which we're being told this is all about, you shouldn't deviate much from the market rates, especially with the collateral.

[DanS]

I agree. So 30% it is.

[JohnT]

As told to you by others, 15% isn't market rates for this type of loan. 30% is.

You're charging under-market rates - as is Spec. That's all we're saying.

And, apparently, you agree.

you shouldn't deviate much from the market rates

As someone who has done enough loans in the past, I can tell you that A) automobiles are considered terrible collateral and B) the typical rate of interest for a "lender of last resort" (places like TransCanada Credit in Canada) is in the 30% neighbourhood.

[Kontiki]

He's massively undercutting market rates for someone in that person's situation.

[JohnT]

I know - he's trying to drive honest lenders like ourselves out of business!