In India, the banking system is still traditional. Yes there is the occasional Lakshmi chit fund and Vini Vic scheme. We all take housing loans, student loans etc. After getting to the US however, I see some of the “advance” (pun intended ) ways in which people can get hold on money. Its about the “right here right now” out here. Its mainstream. Plus, its not even the banks that do this.
1) Title loans – There are tons of ads. Smiley couple needs cash. Sad. Walk into a “title loan” shop and walk out with money, beaming. Anyone can get cash. Instantly. What they omit to tell: They just kept your car as security for a 500 buck loan.
2) Cash into gold – Got broken chains and unwanted gold jewellery at home? (Yeah really they believe jewellery is unwanted). Just send it in an envelope to the automated processing center and they will send cash. Instantly. Almost like its free.
3) Turn a structured settlement or annuity into cash now – Its just simple cash flow discounting to present value with obviously a tidy profit involved. The ads encourage people to get their cash flows (usually from lawsuit settlements) discounted so they can buy their dream home!
4) Cheque discounting – Even Walmart does it. Take a check and get cash immediately for a small fee. Encourages people to not even wait for 2 days that it takes for a cheque to clear.
5) Most shops offer EMI schemes and many many people buy expensive stuff only because of those schemes. Cars, houses? Fine. What about TV, furniture, holidays. Yup all of this.
Financial advancement is great. Deception is not cool. Some of this is taking place in India. Its just not mainstream yet. I really hope it remains that way.
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