reply on: Borrow $60,000 and Pay Back $255,931 \ stacker news ~charts_and

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You can’t have a global value because of different currencies and rates of inflation

I would start with the 10 year treasury yield as a benchmark

If the yield curve is inverted then look at the 1 year or 90 day yield

Anything above can be considered usury except

If a borrower has terrible credit history then a lender has to raise borrowing rates to reflect credit risk

Thanks! This makes much more sense, I assume this approach on the calculation is applicable everywhere.

Thanks

We tend to look at the borrower's perspective only or the lender's perspective only and we should look at both for a fair and balanced perspective

do you mean that credit history of the lender should be on the table in this type of situation?

The borrower is asking and trying to persuade the lender to lend him money

The lender has to ascertain the credit risk of a borrower: high, low, medium, etc

Most lenders have certain criteria before they even consider a loan application

it's basically on us to make the due diligence and check before going out to the first entity to ask.

A borrower can seek pre-approval and the lender will know right away if the borrower meets their minimum requirements