Loan Scam??

[+ quoththeraven]

If it's only 15k you might be able to find a friend or family member to loan you the money on repayment terms you like. Many people like to extend these loans to people they trust as they don't declare the interest received on their taxes. Of course you also can't declare the interest paid. Both parties win but the IRS loses.

In addition to encouraging tax evasion, where do you get the idea that the interest on a personal loan is deductible anymore?

 

Moreover loans between friends and family members are great opportunities for misunderstandings and hard feelings, especially if they're undocumented.

[Beancounter]

If it's only 15k you might be able to find a friend or family member to loan you the money on repayment terms you like. Many people like to extend these loans to people they trust as they don't declare the interest received on their taxes. Of course you also can't declare the interest paid. Both parties win but the IRS loses.

Perhaps the worst advice @Kman could receive. I don’t even know where to begin so I won’t. Smh.

[+ WilliamM]

In addition to encouraging tax evasion, where do you get the idea that the interest on a personal loan is deductible anymore?

 

Moreover loans between friends and family members are great opportunities for misunderstandings and hard feelings, especially if they're undocumented.

 

Agree. Years ago I lent fifteen hundred dollars to a good friend who I saw two or three times a months. He decided paying the money back would be buying me dinner occasionally. Over time, yes he would have paid me back. But, that was not my understanding when I gave him the money.

[+ Travis69]

Perhaps the worst advice @Kman could receive. I don’t even know where to begin so I won’t. Smh.

I am a corrupt dishonest stupid person. Sorry.

[+ Travis69]

In addition to encouraging tax evasion, where do you get the idea that the interest on a personal loan is deductible anymore?

 

Moreover loans between friends and family members are great opportunities for misunderstandings and hard feelings, especially if they're undocumented.

I am a corrupt dishonest stupid person. Sorry.

[+ Travis69]

Agree. Years ago I lent fifteen hundred dollars to a good friend who I saw two or three times a months. He decided paying the money back would be buying me dinner occasionally. Over time, yes he would have paid me back. But, that was not my understanding when I gave him the money.

I am a dishonest corrupt stupid person. Sorry.

[+ Kman]

you can say you trust/love your friends and family all you want but when borrowing money gets involved it never seems to end well. As I am typing this I think I paid my friend's share of the rent on a few occasions back in college...I am not sure if he ever paid me back??

 

Anyway I don't understand the credit score system...it wants you to be in debt but not too much, and having no debt is bad apparently.

[LivingnLA]

So, I've been shopping around for a loan and I don't have great credit right now (long story). But I got an offer for a loan for far more than any bank would offer with a great monthly payment...one I know I could afford. The odd part is the loan officer or whoever he was said they would first send me a smaller loan that I would pay back immediately (within a few hours/whenever the funds got to my account) to build my credit/build a relationship with this loan company to validate giving me the greater loan amount...additionally they want me to pay back that smaller loan via prepaid visa card??? I hear the visa gift card and I immediately think scam...BUT I am giving them money that they have to send me first??? The only money I would be losing would be the fee for buying the card which wouldn't even go to them. Of course it screams scam...but also believable. Thoughts?

 

It's a scam relying on the delays built into financial transactions. The red flag is requiring a prepaid debit card for repayment. Those are not easily traceable and the money is removed from your account with no easy way of recovery. Most people outside of banking don't know the in's and out's of money transfers. Even wire transfers, if they're international, have a day or two of reconciliation time before both banks agree the transfer is valid and complete.

 

My guess: the "smaller loan" is a fraudulent transfer that will ultimately be rejected, but you will have already spent your real money to fund a debit card and send it to them, probably also electronically. Your money will be long gone by the time the "smaller loan" transfer is rejected and reversed.

[Walker1]

On the question of scams. A friend of mine is having serious health issues and fighting with insurance and having some serious financial stress. Their doctor referred to bettermed. Apparently offers 3.9% financing for 15 years and two years payment deferred .

 

Anybody used this-apparently they have a 1000 bucks or so agency fee at first. I never heard of such a thing-at such low interest rates-but since the topic came up-thought if anyone heard of such a thing? Especially since doctor recommended to her?

[rvwnsd]

On the question of scams. A friend of mine is having serious health issues and fighting with insurance and having some serious financial stress. Their doctor referred to bettermed. Apparently offers 3.9% financing for 15 years and two years payment deferred .

 

Anybody used this-apparently they have a 1000 bucks or so agency fee at first. I never heard of such a thing-at such low interest rates-but since the topic came up-thought if anyone heard of such a thing? Especially since doctor recommended to her?

I haven't heard of this firm, but I also haven't had a reason to use their services. However, I've researched online lenders and it is not unusual for a lender to collect a loan origination fee.

[+ Keith30309]

I'm usually highly suspicious of point of sale financing, especially places where people may be facing an unexpected, large expense, but this has a good BBB rating.

 

That said, their terms seem too good to be true: 3.9% fixed, 2-years interest free (!), no late payment penalties (!), nearly open-ended term.

Something doesn't smell right about this. I tried to find their Truth In Lending statement, or even general description of the terms, and was unable to find any details without going thru the load application process. Even with a loan origination fee, I don't know anywhere that a large unsecured loan is 3.9%. I guess if you're charging a $1000 loan origination fee and financing *allot* of money @ 3.9% over 15 years it could work out,

[+ Kman]

I am not going going to do business with this site after I read the terms of service. A majority of it was in legal jargon but some parts were not:

Almost without exception, every Client has been referred to a lender or lending partner that has approved or was willing to approve the Client for either a loan or a line of credit or both of varying amounts. Some Clients mistakenly think that the fee they are paying is a fee for a loan. This is not accurate. The fee is for the information we provide to the Client (referrals).

 

And then:

If you receive the full amount that you request, then everybody is happy. If you receive a lesser amount, it is only fair that we still get paid for a portion of the fee.

If there are any problems whatsoever, we are here for you and are always willing to work things out with you. All we ask from you is communication and cooperation. We only want satisfied customers.

 

The "then everbody is happy" phrase really threw me.

[+ Kman]

On the question of scams. A friend of mine is having serious health issues and fighting with insurance and having some serious financial stress. Their doctor referred to bettermed. Apparently offers 3.9% financing for 15 years and two years payment deferred .

 

Anybody used this-apparently they have a 1000 bucks or so agency fee at first. I never heard of such a thing-at such low interest rates-but since the topic came up-thought if anyone heard of such a thing? Especially since doctor recommended to her?

I've never heard of this agency. Usually hospitals are willing to work with a patient to set up a payment plan or your friend may be able to apply for medical assistance.

[Walker1]

I've never heard of this agency. Usually hospitals are willing to work with a patient to set up a payment plan or your friend may be able to apply for medical assistance.

Unfortunately my friend does not qualify for any medical assistance. She has a decent house, 401k and nice income. Just got divorced after a long marriage and is paying alimony and child support for last kid. The guy didn't earn much. But with all this money going out and she took on a lot of the loans and two kids in college and now this illness has pushed her over the edge.

 

This country is horrible for middle class -if some adverse life event happens we are screwed every which way. Can't afford many things and don't qualify for assistance due to income/wealth thresholds.

 

She actually asked the doctor for a payment plan and they referred her to this.

 

I just don't know if it was a scam, take the 1000 dollars and then say she was not qualified for a loan?

[+ Kman]

Unfortunately my friend does not qualify for any medical assistance. She has a decent house, 401k and nice income. Just got divorced after a long marriage and is paying alimony and child support for last kid. The guy didn't earn much. But with all this money going out and she took on a lot of the loans and two kids in college and now this illness has pushed her over the edge.

 

This country is horrible for middle class -if some adverse life event happens we are screwed every which way. Can't afford many things and don't qualify for assistance due to income/wealth thresholds.

 

She actually asked the doctor for a payment plan and they referred her to this.

 

I just don't know if it was a scam, take the 1000 dollars and then say she was not qualified for a loan?

 

Have her ask billing for a payment plan...the doctor doesn't know anything. The bettermed.com site seems legit but 1K is a lot to risk if you are not right.

[+ Kman]

This country is horrible for middle class -if some adverse life event happens we are screwed every which way. Can't afford many things and don't qualify for assistance due to income/wealth thresholds.

 

Exactly!

[+ nycman]

I’m not a big fan of these “medical expense” loan companies.

 

In general, they are not scams....but that doesn’t mean they’re not evil.

 

I understand the doctors position, he/she doesn’t want to get stuck

financing your healthcare, but I think referring patients to the

loan agencies is unethical. Patients can find their own financing.

 

By referring patients to them, the doctors are tacitly endorsing the

loan agency. In fact, that’s the entire business model these companies

are based on. Use the patient’s trust in their physician to exploit them.

 

To me.....that’s evil.

[+ quoththeraven]

This country is equally horrible to working-class and poor people too, albeit maybe over different things. Medicaid isn't easy to get - you have to be really poor ($20,000 a year for one person in NJ is enough not to qualify) or disabled, and even for someone disabled it's a pain; you need to report 5 year's worth of financial information, sales, transfers and current assets to prove you haven't impoverished yourself through uncompensated transfers to friends and family. Gathering all that information takes time and is generally more burdensome for the disabled person anyway. Furthermore with severe or expensive illnesses there are fights over formularies, treatment coverage, what's experimental and what's not, equipment and level of care.

[Gadfly22]

This country is equally horrible to working-class and poor people too, albeit maybe over different things. Medicaid isn't easy to get - you have to be really poor ($20,000 a year for one person in NJ is enough not to qualify

We are actually quite generous to poor people. Not sure how you define working class. The problem with medicaid (they call it NJ Family Care here in NJ) is that incentivizes people not to work. If you qualify for it even by $1 you have it easy as can be - Everything is covered 100% (doctor, ER, hospital stays, dental, vision, all specialists, all prescriptions even for brand name drugs if there is no generic). No copays, no paperwork and you never see a bill if you use the providers in their system (which there are a lot of). If you don't qualify you have to buy a policy off the healthcare.gov site - which you can still get a substantial subsidy - but you have to deal with copays, deductibles, co-insurance, formulary lists, etc. Almost makes me want to quit my job right now!

I just looked up the qualifying income levels

Single: $16644

Couple: $22416

Family of 4: $33948

[+ quoththeraven]

We are actually quite generous to poor people. Not sure how you define working class. The problem with medicaid (they call it NJ Family Care here in NJ) is that incentivizes people not to work. If you qualify for it even by $1 you have it easy as can be - Everything is covered 100% (doctor, ER, hospital stays, dental, vision, all specialists, all prescriptions even for brand name drugs if there is no generic). No copays, no paperwork and you never see a bill if you use the providers in their system (which there are a lot of). If you don't qualify you have to buy a policy off the healthcare.gov site - which you can still get a substantial subsidy - but you have to deal with copays, deductibles, co-insurance, formulary lists, etc. Almost makes me want to quit my job right now!

I just looked up the qualifying income levels

Single: $16644

Couple: $22416

Family of 4: $33948

I know about NJ Family Care. I was on Medicaid in NJ and lost it when I qualified for Social Security retirement payments even though Social Security also determined I am currently disabled and gave me retroactive SSI, none of which I saw because it all went to repay the $140 a month (or less) in General Assistance I received and my temporary rental assistance that kept me from being thrown out on the streets. I expected the GA to be recouped but hadn't thought about the TRA being recouped. (And the reason the GA was sometimes less than $140 was because $42 was taken out as my contribution toward rent even though that meant I had less than $100 a month to pay for electricity, internet, gasoline, car insurance, and household and cleaning items. That's ludicrous.

 

That the private insurance market stinks and we need universal healthcare isn't an argument against Medicaid. Furthermore, it's not unlimited, it's a gatekeeper system which is a pain for someone who needs to see a numbers of specialists and has a strict formulary and other bureaucratic restrictions, and while there are sufficient doctors where I am, that doesn't mean they're adequate or easy to choose from. I had terrible experiences with two rheumatologists. And of all the doctors I had seen back when I had employer-provided coverage, only one (the GP practice) accepts Medicaid. I've had to look for new ones.

 

Also I have a four figure bill from the anesthesiologist for my colonoscopy who keeps sending me bills, so no, it is not entirely free.