Not bad...a 300% return. Is my math right?

3chordcharlie

Diamond Member
Mar 30, 2004
9,859
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Originally posted by: her209
Sounds too good to be true.

Really?

It's actually about a 30% annualized rate, which isn't exactly out of the ballpark.

Note: that doens't make it a 'good' investment, I'm just saying.
 

PAB

Banned
Dec 4, 2002
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I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.
 

Alone

Diamond Member
Nov 19, 2006
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So you can lend out money like that with a good rate? What's the risk on that?
 

erub

Diamond Member
Jun 21, 2000
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Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.

25% a month, hahahahhaa

what are you, a payday loan company? I dont even think they charge that much. And they get sh!t for collateral.

You're an idiot.
 

krunchykrome

Lifer
Dec 28, 2003
13,413
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Originally posted by: erub
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.

25% a month, hahahahhaa

what are you, a payday loan company? I dont even think they charge that much. And they get sh!t for collateral.

You're an idiot.

I laughed at that too.
 

thepd7

Diamond Member
Jan 2, 2005
9,429
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Originally posted by: erub
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.

25% a month, hahahahhaa

what are you, a payday loan company? I dont even think they charge that much. And they get sh!t for collateral.

You're an idiot.
Have you ever seen a pawn shop/payday loan places rates? I saw them and was amazed. The APR was in the thousands. If he makes even close to that loan sharking that sounds about right.

 

Mardeth

Platinum Member
Jul 24, 2002
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Thing is, the loan isnt compounding, so for the costumer the rate wont be in the thousands.

Example:
$10,000x25%=$2,500
For the sake of simplicity he pays interest only 12 times meaning 12x$2,500=$30,000

((10,000-30,000)/10,000)x100%= 200%

I hope I got that right. Anyway, if PAB actually does that, he isnt stupid, the one loaning is. But I have a hard time believing that someone, who supposedly has collateral, will pay 25% monthly unless its a very small sum like $100.
 

allisolm

Elite Member
Administrator
Jan 2, 2001
25,004
4,362
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Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.
Can anyone say usury?

 

BrownTown

Diamond Member
Dec 1, 2005
5,314
1
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Originally posted by: allisolm
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.
Can anyone say usury?

can anyone say go to the slums and they on every corner? Not even kidding its terrible, driving through the slums every street corner has either a gun store, a liquor store, or a cash in advance store. And some of the stores do combinations, like they'll let you buy a gun on cash in advance etc. It is terribly sad that some people actually accept such terrible rates (hundreds or thousands interest rates) just to get money a few days/weeks earlier. I cannot honestly fathom how someone could be so completely retarded to throw their money away in that fashion.
 

jupiter57

Diamond Member
Nov 18, 2001
4,600
3
71
Originally posted by: erub
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.

25% a month, hahahahhaa

what are you, a payday loan company? I dont even think they charge that much. And they get sh!t for collateral.

You're an idiot.

It's easily done at his Middle School: Loan the other kids $10.00, & when the check comes at the first of the month, they pay him back $12.50!
 

erub

Diamond Member
Jun 21, 2000
5,481
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Originally posted by: BrownTown
Originally posted by: allisolm
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.
Can anyone say usury?

can anyone say go to the slums and they on every corner? Not even kidding its terrible, driving through the slums every street corner has either a gun store, a liquor store, or a cash in advance store. And some of the stores do combinations, like they'll let you buy a gun on cash in advance etc. It is terribly sad that some people actually accept such terrible rates (hundreds or thousands interest rates) just to get money a few days/weeks earlier. I cannot honestly fathom how someone could be so completely retarded to throw their money away in that fashion.

yep, you are right. Georgia is currently having a debate on this, the rate that they authorized is $15 for each $100 loaned for a two week period.

For a typical $300 loan extended for two weeks, the $45 fee would compute to an annual percentage rate of 391 percent.

Still less than the 600% rate PAB charges

Link
 

PAB

Banned
Dec 4, 2002
1,719
1
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Originally posted by: krunchykrome
Originally posted by: erub
Originally posted by: PAB
I loanshark on the side, and my rate is 25% a month if I know you, with collateral.

For me to do this deal, I'd have to make $7500 in interest if it went 4 weeks and $10,000 in interest if it went 6.

25% a month, hahahahhaa

what are you, a payday loan company? I dont even think they charge that much. And they get sh!t for collateral.

You're an idiot.

I laughed at that too.

I prefer the term "travelling pawnbroker"

Originally posted by: Mardeth
Thing is, the loan isnt compounding, so for the costumer the rate wont be in the thousands.

Example:
$10,000x25%=$2,500
For the sake of simplicity he pays interest only 12 times meaning 12x$2,500=$30,000

((10,000-30,000)/10,000)x100%= 200%

I hope I got that right. Anyway, if PAB actually does that, he isnt stupid, the one loaning is. But I have a hard time believing that someone, who supposedly has collateral, will pay 25% monthly unless its a very small sum like $100.

This is correct, loan isnt compounding. However interest is never paid 12 times, its paid twice at max by smart people. For example, if I give a $10k loan - I'll pick up $2500 in interest between day 1 and day 31. If it goes to day 32, it goes to another $2500 in interest. If he stops paying interest, I take the item - which I then resell to get my investment and profit back.

People who cant go to a bank and need cash within a few hours do this. I've done this before for a few people who are in tradtionally well paying industries/businesses who just want some extra money on the side.