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  Reply # 1227476 2-Feb-2015 10:25
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Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20% on payday loans, according to a BBC article.





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  Reply # 1227477 2-Feb-2015 10:28
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deadlyllama: There should be some legislated restriction on how interest rates are displayed.  I remember "Super Loans" billboards in Wellington advertising an 8% interest rate and thinking "actually that doesn't sound too bad" until I found out that was 8% per week - north of 500% per year!

A real "harmony" P2P lending site would lend to people that banks/etc wouldn't, at reasonable interest rates.  Therefore it wouldn't make rapacious profits, so good luck finding venture capital to back it.


They do exist, sort of as a microfinance alternative to direct donations - see, for example http://www.lendwithcare.org/ and http://www.kiva.org/

I haven't looked at Harmoney in any detail, but part of the theory behind P2P lending is that the market should bring down the interest rates for good borrowers over time. So suppose someone borrows a few times and pays it back in full, on time (in trademe parlance, gets good feedback/stars). This person becomes a desirable borrower, so may be able to borrow at say 15% instead of 20%. The more lenders "competing" to lend to good borrowers, the lower the interest rate should be.




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  Reply # 1230070 3-Feb-2015 00:21
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Geektastic: Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20% on payday loans, according to a BBC article.


Which is extremely ineffective.  Just go and calculate a loan at nimble.com.au - I dare you.

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  Reply # 1230279 3-Feb-2015 10:34
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Kyanar:
Geektastic: Australia has an interest rate limit of 4% per month, after a maximum up-front fee of 20% on payday loans, according to a BBC article.


Which is extremely ineffective.  Just go and calculate a loan at nimble.com.au - I dare you.


Presumably it is the enforcement that is ineffective rather than the limit....

However looking at Nimble's fees, they are exactly a fee of 20% and 4% interest, as defined in the limit.





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