SCREWED by FINANCE RATES

vicshere says on Jul 30, 2005, 11:29:

come on BAQ there is black market loaners who charge 10% per month that's how much 120% a year actually more if you compound it....that's why there is so much business in remate (foreclosures) people buy things on credit and then lose there jobs for what ever reason and bang they lose there house moto car whatever....and thats why you always ask foro 2 fiadors for any loan or business deal



listo
"con mucho gusto"
Vic
homepage
http://spaces.msn.com/members/jacintoplace

listo

0 funny, 0 helpful.

utopiacowboy says on Jul 30, 2005, 11:33:

While you're examining interest rates on loans, check out how much the Colombian banks pay in interest on deposits. Come back and tell us about it.

Disclaimer: any comment I make is inane and is not to be taken seriously, and is so patently ridiculous that no one should take it seriously, even as an insult.

0 funny, 0 helpful.

BAQ says on Jul 30, 2005, 11:57:

Oh yea UtopiaCowboy,

Know EXACTLY what you mean. Bancolombia give me I think about a whole 1% on my money.

I guess what confuses the hell out of me is HOW can the Government allow this practice to continue? I am NO rocket scientist and MY dumb ass can figure out that allowing the banks to charge such high rates HURTS the economy. If you sell more, you get more revenue in taxes, create more jobs ect. So if my dumb ass "Gets it", whats wrong with the Govt, are they snortin Coke?

I am by NO MEANS "Rich", but thank god I can afford to pay CASH for most things.

Semper Fidelis !

0 funny, 0 helpful.

Gomezman5 says on Jul 30, 2005, 12:28:

It's funny...... It's funny. You guys start these threads with very accirate depictions of what happen all the time.....uh hmmmmm, let me say that again but just a bit louder----ALL THE TIME in Colombia, and then you wonder why I say to you people that I would never live in Colombia.

You ask the question: "How/why does the Government allow these types of finance rates."

Are you asking that question on a serious note? I don't believe that. You know why that is allowed. It's the same reason that they allowed the proliferation of drugs and mafia. It's the same reason they don't have any substantive laws to protect the enviornment (clean air / clean water protection) It is the same reason that they allow any enterprise, whether it be legal or illegal to take place that is clearly not in the interst of the society at large. It's called......you know it.........just say it.........uh.....I think they call it $$$$$$$$. Call it money. Call it pesos. In the end, it's all the same. This kind of robbery you described is probably not only allowed, but it's encouraged, because those who are in a position to implement controls will not do so because they invariably, to one degree or another have a pecuniary interest in seeing the Usary laws (or lack of them) high.

Yea our Colombia.It's 2005 and living there, at least to some degree, is like like living in the old Wild West of the USA.

0 funny, 0 helpful.

tomtom33 says on Jul 30, 2005, 12:41:

It's called "Free Market" Something the US could learn from actually. The market sets the rates. That HELPS the economy. What the government needs to do is stimulate COMPETITION, not regulate rates.

There ARE laws in Colombia to protect the environment. They are just not enforced.

With all its warts, I love Colombia. I just thank God I am retired and don't need to earn or borrow money.

0 funny, 0 helpful.

Lucia Rojas says on Jul 30, 2005, 12:59:

environment is the last thing on the list A couple of years ago all the manatees in the Rio Sinu were dying because of the oil spills... nobody gave a damn. And they're an endangerd species.!!!

0 funny, 0 helpful.

BAQ says on Jul 30, 2005, 14:47:

Yea however I understand they want the MONEY, do double about it. But as a GOVERNMENT want more money, would it not be better to set interest rates where more people could afford things?

One example, the motorcyle thing. The BANKS make out on the sale of motorcycles but NO ONE ELSE. If the interest rates were lower, the sales of motorcycles increases, more people could afford them.

More sales of motorcycles = More REVENUE for the Govt in yearly license fees, the tax on the sale of gasoline, tires, parts ect. More sales = more jobs, more jobs = more people with money to spend = more people buying products = more TAX REVENUE ect.

Thats why I don;t understand why the Colombian Govt would allow ONE INSTITUTION (BANKS) to profit when in the big picture, it screws the Govt out of recuring revenue.

Like I said before, I am no rocket scientist but Jesus, HELLO !

TOMTOM33, I am also retired, so I know exactly what you mean!!

Still LOVE living here, just sometimes the stupidity really gets on my nerves.

Feels good being able to VENT !

Thanks for listening !

Semper Fidelis !

0 funny, 0 helpful.

rjstuff says on Jul 30, 2005, 15:05:

I remember 21% rates and higher in USA back in the 70s and early 80s before some laws were introduced to cap the rates charged by Credit card companies etc. So Colombian banks financing cars/motorcycles at 28% is not that far off then what used to happen here! Unless there is a consumer protection group (or agency) or people scream about it - change will not happen. By the way - H&R Block and other tax preparers give you your tax refund immediately calling it a fast refund or something - interest rates are typically 36% or more on these - that happens today in USA! As always - buyer beware!

0 funny, 0 helpful.

tomtom33 says on Jul 30, 2005, 18:50:

If you cap interest rates, capital dries up. If the market sets the rates, the capital will be available. What good is it to set rates at, say, 15% and have all the capital move toward other investments? Then there is no money available for loans. Then there are only cash sales = fewer units sold = layoffs = a nose dive for the economy. It's not only the banks that could be burned.

Be very careful how you regulate the market.

0 funny, 0 helpful.

BAQ says on Jul 30, 2005, 19:07:

tomtom33 Tomtom33, ok, I am just not understanding. Lets say you want to purchase a motorcycle. You don;t have the money to pay CASH, you have a reasonable down payment and could afford the monthly payment if the interest rate was lets say 15%, however at an interest rate of 30% or more, you can;t afford the higher monthly payment, so you DON;T buy the motorcycle. How does that help the economy? If fewer units are being sold on credit because of high interest rates, how does that help? I am thinking (and I could be wrong) that increased sales is good for the economy. I just don;t understand how selling fewer units because people can;t afford the payments is good for any economy.

Semper Fidelis !

0 funny, 0 helpful.

Crazy4Cali says on Jul 30, 2005, 20:49:

In the U.S. they allow those "pay day" loans for something like borrow $75 today and pay back $85 next week. That works out to about 380%/yr.

0 funny, 0 helpful.

lpdiver says on Jul 31, 2005, 06:19:

You Guys are Hysterical... Remember Colombia is a nations controlled by drug capital. I don't like it either but it is a fact. Just read the papers at election time and look at the number of canidates murdered. Don't you think the imcumbents or a large portion of them anyway are controled by interests other than the populace at large or the enviroment. A lot of Colombians are also pissed about this too. But money controls money so for the immediate future...things aren't going to change.

T

"cook some rice!"

0 funny, 0 helpful.

tomtom33 says on Jul 31, 2005, 07:05:

BAQ What I am saying is that no money may be available at 15% unless the market actually sets the rate. You will sell more units if the choices are cash or 30% than if the only choice is cash.

If Colombia set a 15% cap tomorrow, all the capital in Colombia could flow out of the country. If Venezuela had no cap and the market there was 25%, Venezuelans would have first dibs on capital.

0 funny, 0 helpful.

aztec says on Jul 31, 2005, 07:23:

Freeze prices and wages When President Nixon froze wages and prices in the 70's the banks suddenly had no money available for home loans.

0 funny, 0 helpful.

lpdiver says on Jul 31, 2005, 07:27:

I remember that well I got a bank cd at 21 % AND A SHOT GUN FOR A FIVE YEAR CD. One of my better investments.

tony

"cook some rice!"

0 funny, 0 helpful.

juanalejo says on Jul 31, 2005, 09:18:

Interests My bank will charge me 20% for free investment and 18% for car loans. 28% is their interests if you do not pay on time, which is the highest available. So I do not understand what those guys are about. But if you think there is a speculative problem call the Superintendencia and I can assure you they will investigate. Citibank called me a few days ago to offer credit at 1% per month, so I guess interests are still on the way down.

0 funny, 0 helpful.

BAQ says on Jul 31, 2005, 11:35:

ok Tomtom33, ya, see what you are saying. Juanalejo, will ck with my bank tomorrow (Bancolombia), now this while thing has me curious as to who is charging what.

Thanks !

Semper Fidelis !

0 funny, 0 helpful.

BAQ says on Jul 31, 2005, 11:35:

ok Tomtom33, ya, see what you are saying. Juanalejo, will ck with my bank tomorrow (Bancolombia), now this while thing has me curious as to who is charging what.

Thanks !

Semper Fidelis !

0 funny, 0 helpful.

Gomezman5 says on Jul 31, 2005, 11:58:

US also has high rates as pointed out aboe....BUT Whoever made the above comparson of Payday loan stores and H&R Block is missing an important point. If you want to bring those two entities up, don't forget the many pwopl that still pay credit card rates of 24% and more. But that is different and here is why. The only people that I know who pau those rates, are people who have bad credt scores and therefore would not be able to get credit under any other circunstances. For example, I do not know a person in the US, who does not have credit problems that would go for those instant refunds or would borrow money from a Pay day loan store. These are places of last resort.

The interest one pays on ANTYTHING (mortgages, credit cards,etc) is base on your credit score. That is only fair. If you are going to ask someone to lend you money, and you are a high/higher credit risk, why should the lender incur that higher risk of not getting repaid his money without you having to pay a higher rate of interest. Good credit scores, and low interest rates are not a right, they are earned.

0 funny, 0 helpful.

Crazy4Cali says on Jul 31, 2005, 13:55:

I thought the point was the cap... Sure the rate varies according to the percived or assesed risk, but I thought the original outrage was at the APR being charged on the loan and "how could they get away with charging that in Colombia?" My point was, Colombia isn't the only place where you can find outrageous interest rates.

Now that someone with good credit can get a loan for next to nothing (0% in some cases) doesn't mean that same person won't be presented with an offer to sign up for a 40% loan. Just that that person would be silly to take such an offer.

In any case, it pays to read the fine print (and have a calculator handy).

0 funny, 0 helpful.

spigrimace says on Jul 31, 2005, 14:17:

Legally and illegally... 2.8% a month is maximum a notary will allow.

The black rate is 10-20% a month and many normal folks (not mafia types) do lending this way. The problem is doing it with the right clientelle. Many get screwed and lose 100% when the debtor takes flight. And you cannot get blood from a stone and the law cannot help you as it´s an illegal deal.

Thus the best way to lend money here is with Pagaré en Blanco, (not the chhezy pagaré from the papeleria that by the way, the courts wont enforce after 2 years) original cedula that you make a copy of and (forget what it´s called) but it´s a report that gives you the last 20 year history of government recorded info on a person so it shows titles, transfers, liens, Make sure they have a job, etc.

0 funny, 0 helpful.

BAQ says on Jul 31, 2005, 14:51:

THANKS Spigrimace, THANKS, thats the informaiton that I was looking for. Still trying to figure out how the Honda place is trying to get away with the 40+% loan. Maybe they are financing "In house", who knows, but either way, 40+% for a loan through a legit business is just flat out NUTS.

Semper Fidelis !

0 funny, 0 helpful.

Rubiazo says on Jul 31, 2005, 14:57:

Legally You are not supposed to charge more than 25% in the US OR Canada. I have seen credit card offers that are higher because of some loophole however. There is always a loophole, and there is always someone getting screwed because of it.
Brazil has the world's worst problem with interest rates. People there have credit cards at 120-140% (this is LEGAL there). The prime rate is 18 and change and the BEST mortgage rate you can get right now is around 25%.
Central banks keep interest rates up for a variety of reasons, usually to keep currencies strong and fight inflation. I believe the USA currently has the world's lowest interest rates across the board. My mortgage is at 6.5% right now and I have credit cards at 6.9%.

0 funny, 0 helpful.

BAQ says on Jul 31, 2005, 15:10:

Holy S**T Batman!!! WOW, begs the question, how the hell can anyone afford to buy ANYTHING in Brazil !

This has given me GREAT PAUSE. This I will sit back and be happy I was able to pay cash for my home here (Colombia).

Semper Fidelis !

0 funny, 0 helpful.