Beneficial Consumer Discount Company ripoff Charges extremely obscene interest rates, This so called discount company should be shutdown. Pottstown Pennsylvania

The question here is why can beneficial use the word discount to describe their services if the rate is 26% on loans. There are 3 answers:

1. Beneficial was founded decades ago before the current rate structure was introduced. Keep in mind they were bought by household international and then by hsbc, so it is kind of like the state of new york: first it was run by american natives, then by the dutch, then by the united states. so its the same land, or in this case the same company, but living in new york in 2009 is a lot different than living in new york under the rule of native americans 800 years ago (not better or worse, just different).

2. the rate of 26% is on a personal loan, also called a hard loan or a signature loan. this is a cash loan. that means if you dont pay, your only punishment is a bad credit score, but beneficial could very well never see their money back again. the reason why their mortgage rates are lower than 26% (for example 7-13%) is because there is a better chance someone will pay back if their house is attached, so the loan rate is lower.

my point is you shouldnt think about it like "rates are 4% but i get charged 26%"

you should think about it like "rates are 4% but only 1 out of 3 people repay this personal loan, so they have to charge 26% just to get some of the money back". in banking, its all about probability

3. the third reason they can call it discount is because check cashing places charge upwards of 400% per year for cash loans! yes really! they dont advertise it that way, but they charge about 35% per month, so that comes out to 400% per year or more. the point is that check cashing places try to get their money back in 2 or 4 weeks, while beneficial doesnt mind if it takes 5 years to pay back.

so 400% or 26% for a cash loan, thats a pretty big discount. are there cheaper ones out there? yeah for sure, i saw a personal loan as low as 10%. but you need perfect credit for that...i mean perfect.

does this help?