Would You Sign Up for a 1000% Interest Rate Loan?
Probably not if the true cost was disclosed up front
I write about consumer finance over at my Advocate Andy Substack.
As one Medium reader noted, I like the role of “ballbuster of money scammers.”
One money scam I keep thinking about (and writing about) is SoLo Funds.
The company brokers peer-to-peer loans that effectively work like payday loans.
SoLo says they are providing access to credit for an underserved market.
However, regulators have found their loans carry exceptionally high interest rates — in some cases, up to 4000%. Rates that high got SoLo shut down in Connecticut.
But that didn’t stop SoLo.
And that’s why I’m glad the piece I wrote about them dropping their rate to a mere 1000% earned a featured place over at ManyStories.
The case against SoLo notes that unless users agreed to a tip, their loan wasn’t funded. In other words, the tips were “mandatory fees” and thus, counted toward the loan’s interest rate.
