Felix Salmon a really interesting piece about a professor who took a loan from a private financial company on the APR of 40% after the turn back of credit union away. What you think people, Is it a good for the professor to be taking the cash loans at the 40% interest rate? Actually she didn’t have any kind of choice at that time when she was taking the cash loan from a private financial company but she needed the money and, then she got valued and a little help from her credit union, and from the loan company .Her cash loans terms and tie period to pay back the cash loan extended by the company because of she could afford.
Due to good relationship with the private finance company has indeed improved her credit. Since taking out first loan, she got two different credit cards and also she bought the brand new BMW only for 2.9% financing. The credit union could be unavailable for her to give her cash loan because according them, she is misusing their services and the credit union could in theory be a valuable resource in terms of helping her work out whether for instance she can really afford that car, But the relationship there is broken and they saw that there is no chance that it can be fixed.
A person admits that he let the professor down:”I think we did fail her,” and according to him that he doesn’t think that they did what they have done.” Then credit union dropped the ball with respect to that lady loan application, which was in limbo, when she was in a time of need. But at the same time, according to the main person of the private finance company, she also admitted to him that the credit union would not have given her secured loans, she was looking for.
Actually professor credit good enough now, but it wasn’t before and she qualified mortgage. But now credit union could be able to give her that loan. Actually if she wanted the credit or she wanted to improve the credit score of her then sadly company said that, she can go, where she needed to go.

Credit unions are not a charities fund industry like because they have also responsibilities who deposit money with them ,they do not make the loans that are reasonable likely to lose money, and while the interest rates are at the high terms then companies also could be make any kind of benefits. This suggests that the reason the loans are so expensive is that they cost a lot to make.
Why is this? Because of only the reason is risk of default is very high. It’s hard to get good numbers and estimates vary widely, but I’m pretty sure that they are north of 10%.Thats the pretty high for any kind of loan.
That’s not the only one reason to think that these loans are expensive. Since they are often for very small amounts, these loans have very high amount transaction costs relative to the loan amount. It takes time to process forms for a $200 loan as it does for a $10,000 loan.