This is a great idea. Pretty much just automates those payday loan shops. Need to bring this to America.
in russian they break your knee caps if you dont pay back.
how would that work in america/canadia?
I don’t know. How do those payday loan shops collect now? I don’t see this being much different.
WTF! don’t tell me you were serioues and that shit is legal, how do they actually deal with impairments in russia?
they have it in uk as well, some annualised IR’s I’ve heard them charge are just unbelievable.
They get a check with the amount filled out with a signature and deposit it when you get paid.
How does the lending company then know when exactly to attempt encashing the check?
What if, say the customer continues to have financial difficulties and is refusing to pay - all that the lending company can do is deposit the check in their account. What are they going to do after it bounces…
^ I’d guess they rely on the lendee to require more funds, and therefore they’d just roll it forward with a new loan plus accrued interest. I saw a shop near my office offering a $300 loan, two weeks, for $20. The interest rate implies a low collection rate.
id consider setting up one of these. id only lend to hacksaws so they can go the local hardware store to buy a rusty saw
the loan is forgiven once the sack is sawn off
Not to the overly simplify, but with subprime stuff you’re really just banking on having predictable levels of default. You go in knowing that number will be high, just want to ensure its covered in the 3000% apr your receiving on the paying as agreed folk
Yeap that’s similar to what geo said - however, I am certain there will be an impairments recovery desk, surely it’s worth trying to recover than just let it go …would be interesting to see what kind of tactics they use in the developed world to attempt a recovery, when refinancing is not an alternative