Religious leaders unite against usary

Masomnia

Checked the OED online, 'The fact or practice of lending money at interest; esp. in later use, the practice of charging, taking, or contracting to receive, excessive or illegal rates of interest for money on loan.' We're certainly not talking about 'later use' in the Bible!

This is what happens when you use an Iron Age book to make judgements on modern finance. It just doesn't work!

Patchwork_Quilt

God's people were not allowed to charge interest to each other so that no-one would be enslaved among them.

Not a bad idea.

I suppose it also meant that if you wanted to borrow money, you realised that the person who was lending it would suffer by it. Perhaps it would make you think twice.

We do have an interesting attitude to debt in this country. Perhaps we do need to rethink

Masomnia

Patchwork_Quilt wrote: »

God's people were not allowed to charge interest to each other so that no-one would be enslaved among them.

Not a bad idea.

I suppose it also meant that if you wanted to borrow money, you realised that the person who was lending it would suffer by it. Perhaps it would make you think twice.

We do have an interesting attitude to debt in this country. Perhaps we do need to rethink

But we need lending so that people can buy houses and set up businesses. Debt shouldn't be taken lightly but we can't rule it out!

jamesd

Say I can borrow money at 0% and want to lend it out for one year with all of the money repaid at the end, just the interest paid each month. If 30% of borrowers don't pay any of the money back, what is a fair interest rate?

70% have to pay the money back for the 30% who don't, so it takes a 42.8% interest rate just to break even even if there is no interest, no administration cost and no profit.

In the US at the moment close to 10% of credit card accounts are in default. Those will probably have a higher balance than the ones that aren't but if we just use 10% that's 100 / 90 = 11% just to cover the cost of the defaulters.