Kabbage, and Paypal Working Capital

[MyDataMyChoice]

Who here likes, dislikes, have heard of, used Kabbage.com?

Also, Paypal Working Capital?

[direct007]

Kabbage in my opinion is legalized loan sharking.  It should be used only as a last resort and the opportunity would need to be outstanding to pay the rates that Kabbage charges.  Paypal Working capital is much more reasonable and manageable, however if your credit is good, you can find better deals with credit cards and credit lines.

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[punisher323]

My kabbage experience has been different. I applied and was approved for 47k. You have to pay the loan you borrow within 6month. My business has its slow seasons and this is where kabbage comes in handy. Of course, I never borrow the full amount, but paying over 6k in 1 month is manageable for my business. We gross over 100k during our normal months. The most I've borrowed was 30k, but quickly paid down the loan before accumulating the high interest.

[Creditaddict]

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@punisher323 wrote:
My kabbage experience has been different. I applied and was approved for 47k. You have to pay the loan you borrow within 6month. My business has its slow seasons and this is where kabbage comes in handy. Of course, I never borrow the full amount, but paying over 6k in 1 month is manageable for my business. We gross over 100k during our normal months. The most I've borrowed was 30k, but quickly paid down the loan before accumulating the high interest.

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Pretty sure they take a HUGE fee just to withdraw the money so regardless if you take 1 day or 6 months you already paid WAY TO MUCH for that money.

As the other poster stated I would only do in EXTREME EMERGENCY... it's a big oversized payday loan!

[bostonte]

Kabbage is a percentage of your original loan amount each month, plus 1/6th. Their own website says a "good" loan is "just" 12% fee the first month, 12% the second, and "only" 1% for the other four.

They are purposely selective in their wording so many consumers will be deceived and compare to something like a credit card interest rate and say "oh, 12%, that's not bad".

In reality a 24% credit card interest rate (which we would consider high) is roughly 2% per month. So just that first month you've paid more interest than you would taking 6 months to pay on a 24% card. And you have another 12% fee the next month.

They only "waive" the 1% months if you pay early, not the two high months.

The effective interest rate is absurd. They should be forced to disclose it like payday lenders are. People would still use it, but at least it would put all forms of borrowing on an even field to compare your options.