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Anyone interested in making 9% interest on a one year loan?

Started by shadroch,

82 posts in this topic

fantastic_four

fantastic_four

Posted
Posted
Serious question: who is offering an equity loan or line of credit at 1%?

 

You can break this down every which way but sideways, at the end of each month, my bank charges 4%, and using the same annual lending schedule used in this thread, it would translate to 36%

 

Huh? Equity APR in the US is usually the Prime rate plus 0.5% to 1%, so about 4% to 5%. That's per YEAR, not month, it's an annual rate; the monthly rate is the APR divided by twelve.

 

Linky to my bank's rates here: http://www.vacu.org/Borrow/Loan_Rates.aspx . Can't imagine Canadian banks are much different than ours but I've never looked.

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Transplant

Transplant

Posted
Posted
Serious question: who is offering an equity loan or line of credit at 1%?

 

You can break this down every which way but sideways, at the end of each month, my bank charges 4%, and using the same annual lending schedule used in this thread, it would translate to 36%

Your bank is charging 4% per annum. Shad is proposing 12% per annum, without capitalizing the interest. The interest is paid monthly with no principal payments being made. It's a balloon loan with interest only payments made monthly.

 

If I was looking to park $15k for a year, it would be tempting. But there'd be a lot of details I'd want to know. Are the books GA keys or 100 copies of New Mutants #98 in 9.8? Who provides the insurance policy on the collateral and am I named as a loss payee. Am I a 3rd party beneficiary to the bailment contract? Etc., etc.

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fantastic_four

fantastic_four

Posted
Posted

The guys who own two of my last three companies both are big believers in using home equity as an asset for higher-yielding investments as is an accountant friend of mine. I bet if my current boss were reading this thread and lacked direct capital he'd be willing to borrow $15K on his 5% home equity loan to make a 7% profit--plus a tax deduction on his 5% equity interest--on what Shad is offering. Why shad himself isn't using equity confuses me. (shrug)

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faster friends

faster friends

Posted
Posted
The guys who own two of my last three companies both are big believers in using home equity as an asset for higher-yielding investments as is an accountant friend of mine. I bet if my current boss were reading this thread and lacked direct capital he'd be willing to borrow $15K on his 5% home equity loan to make a 7% profit--plus a tax deduction on his 5% equity interest--on what Shad is offering. Why shad himself isn't using equity confuses me. (shrug)

 

He may be a renter or not have any equity in his home yet.

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fantastic_four

fantastic_four

Posted
Posted
He may be a renter or not have any equity in his home yet.

 

Don't think so, I only brought it up because he said this earlier:

 

I wouldn't mind borrowing against my books for this purchase, but its not the sort of thing you should tap a home equity line for.
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comicwiz

comicwiz

Posted
Posted
Serious question: who is offering an equity loan or line of credit at 1%?

 

You can break this down every which way but sideways, at the end of each month, my bank charges 4%, and using the same annual lending schedule used in this thread, it would translate to 36%

Your bank is charging 4% per annum. Shad is proposing 12% per annum, without capitalizing the interest. The interest is paid monthly with no principal payments being made. It's a balloon loan with interest only payments made monthly.

 

Thanks MIke - appreciate the info. Equity line-of-credit products can function similarly, but usually over longer terms (i.e. no amortization) and be interest only.

 

I won't beat this horse any further - I do agree that there are a lot of details here that need to be carefully minced with the assembly of a few wigs to spare from all the hair splitting going on.

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fantastic_four

fantastic_four

Posted
Posted
and using the same annual lending schedule used in this thread,

 

This made me chuckle. I'm telling you, they're not going to get it. ;)

 

oH, I think some of us get "it".

 

A.P.R. is not a complicated concept

 

The problem is that the subject heading of this thread is extremely misleading

 

How is the subject heading misleading? He's offering you 9% interest on a one year loan--it's what he said and as far as I can tell it's what he meant, made sense to me before I ever clicked the thread--aside from why he wouldn't go with a lower-interest, lower-risk loan from a bank.

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RockMyAmadeus

RockMyAmadeus

Posted
Posted
and using the same annual lending schedule used in this thread,

 

This made me chuckle. I'm telling you, they're not going to get it. ;)

 

oH, I think some of us get "it".

 

A.P.R. is not a complicated concept

 

The problem is that the subject heading of this thread is extremely misleading

 

My original comment was predicated on comicwiz's response to you, so yeah....

 

(thumbs u

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fantastic_four

fantastic_four

Posted
Posted
My original comment was predicated on comicwiz's response to you, so yeah....

 

(thumbs u

 

Bizarre watching you be snide about people "not getting" comicwiz's point that he was confused about. Him being confused is fine, you being arrogant about it is so...out of character. :eyeroll:

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october

october

Posted
Posted

People will argue about anything.

 

He pays 12% once on a 15k loan. That comes to $1800.

 

He pays 1% monthly on a 15k loan without compounding. That comes to $1800.

 

Who cares if he calls the loan "Susan", the money is the same. :makepoint: Too many dorks on this board, financial and otherwise.

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RockMyAmadeus

RockMyAmadeus

Posted
Posted
My original comment was predicated on comicwiz's response to you, so yeah....

 

(thumbs u

 

Bizarre watching you be snide about people "not getting" comicwiz's point that he was confused about. Him being confused is fine, you being arrogant about it is so...out of character. :eyeroll:

 

So, so easy..... :cloud9:

 

Oh, and Comicwiz may have been confused, but Prechter wasn't, and it was ultimately to him that I was responding. Oh, I know, you and facts have mutual restraining orders, but really....

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shadroch

shadroch

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Seems like the usual suspects are having trouble with their reading comprehension.

What is so difficult about understanding "a third party that is mutually agreed upon".

 

As to what happens if the books are stolen by the third party, that was explained in PMs with a person interested in the deal. Part of the 3% fee the third party would recieve is to pay for an insurance policy to cover this possibility.

 

Another reason I wouldn't tap into a line of credit is to avoid a precedent. I tap it for my hobby, how do I say no when someone wants to tap it for their hobby or start a business I don't agree with. My homes are not ATMs to finance cars, comics, vacations, ect, ect.

About three years ago, I had a pre-established LOC. Then I get a letter from my bank saying they are freezing it at the current balance. I call them and tell them I have no balance. They reply that that is correct, and the account is frozen at that amount. They were not canceling it, just freezing it at zero.

 

I understand this deal is not for everyone. A few people get it and have the income, others get it and don't. Still others have the money but the deal doesn't appeal to them. Theres even a few folks that don't get it, don't have the money and still aren't interested.

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