It’s the end of the semester here, which means lots and lots of grading to do (I know, I know—if I didn’t assign it, I wouldn’t have to grade it, right?). So I’m grading papers last night, and I have MTV Hits on for background noise (they’re showing Yo! MTV Raps reruns from 10-15 years ago—how cool is that?), and a commercial comes on as I happen to take a break from eyestrain reading. It’s for a place called Cash Call, which offers fast loans (as in 1 day) over the phone or online, perfect for those times when life throws you a curve. Right?
Here’s the catch: If you take out, say, a $2600 loan from Cash Call (the example they give in the commercial’s fine print), you’ll pay—are you sitting down?—99.25% interest for 42 months! You end up repaying nearly $9100, or 3.5x the original loan! How about a $10,000 loan, with payments spread out over 10 years? Sure, if you’re willing to pay 59.46%, or almost $60,000. (“Exceptionally qualified applicants” may qualify for a 29.26% loan. Woo-hoo!)
I believe it would actually be more financially responsible to buy a $15,000 car at 12% for 6 years ($293/month) and sell the car for $10,000 than to take one of these loans. There are plenty of loan calculators available online. All I can say is… do the math.