Where is Luigi when you need him?
Could I get a loan to help me pay a klarna instalment?
How deeply can we dig this hole?
I knew a guy in college that kept getting new credit cards to pay off other credit cards he had maxed out. I wonder what his credit looks like now.
Gatekeeping basic necessities behind paywalls is economic violence.
Klarna is really pissing me off. I got a refund from a place, and they put that money into some kind of Klarna Wallet or whatever, by default, instead of in my bank account where the money originally came from.
So I go to their stupid site, and select the option to refund to my bank account, and they are warning me this will take up to 7 days! For no other reason than they wanting my money in their account so im tied to their service.
Stay the hell away from Klarna. Im doing that from now on.
Stay the hell away from Klarna
Definitely! Klarna is one of the few parties that won’t cooporate when a Dutch citizen gets government mandated debt settlement. All other debt agencies settle and freeze interests as the state takes control of the debtee’s finances but Klarna just stacks interests like there’s no tomorrow.
The idea behind the scheme is to have the debtee get their personal affairs in order, while an agency (ngo-like) takes care and control of all finances. You get like 50 eur to spend each week but this is also for groceries and all other savings are either used to settle debts, pay rent and other subscriptions and most subscriptions are cancelled with contracts being voided left and right.
It’s a very invasive, but very effective program. Klarna is, as a for-proft debt agency, not having any of it.
wtf, how is that legal? if someone is obligated to pay you some refund, how can they send it to some other private business instead?
Oh, by the way it’s not coming soon, I could do it right now on the portal I pay my rent on. It’s through Flex.
they will make you poor to get rich, and they will get rich from your poorness.
coming soon: Americans are fucking drowning in debt
neofeudalism here we come!
When it comes to making a purchase of like $500 - $1000, I use affirm. My credit score is 715, and I get a rate of 16% APR. My credit cards won’t give me a lower rate than 30%. I only make 1 purchase like this per year. In 2024 I used it to by an electric bike. In 2025 I used it to purchase all the parts I needed to build a new PC. When I do this, I usually have about half of the money for the thing I’m buying already saved.
The fact like services like this are now doing rental payments is absolutely a direct result of the late stage capitalism hellscape caused by ballooning housing prices and stagnant wages. The fact that housing has been turned into a commodity to make rich people richer is disgusting.
All that aside, these services can be a much better alternative to a credit card when used responsibly and you plan well with your budget.
“Can’t pay rent? Don’t worry we have an even more humiliating solution for you!”
Can’t pay your monthly rent? We can pay it for you with a monthly payment schedule.
Richest nation in the world.
Does include national debt?
Klarna 'bout to find out their business model doesn’t work as well in the US compared to the Nordic countries and EU, as
- People are already up to their neck in debt, putting Klarna to the back of the queue in case there’s a default
- Personal bankruptcy is a thing
Especially the Northern Europe personal bankruptcy is really not a thing, fuck up your finances and you’re never going to see a penny you make (above what you strictly need to live) until everything has been paid back. Debt that is actively being collected also never expires.
There’s a good reason Klarna’s been able to thrive in this environment – getting debt from banks is quite difficult and you have added security from the draconian collections process.
In the US a company ignores credit scores at their own peril. The bankruptcy process is one of the few things that works better in the US than in e.g. my home country Finland.
People are already up to their neck in debt, putting Klarna to the back of the queue in case there’s a default
People in debt (before there is professional help) end up paying the important things first (such as rent) and then choose to pay off the debt that is most within their reach. Klarna is much more likely to be a low amount compared to their creditors.
It might be true their loans are more likely to be payed back while also they might have less to loose in case of a personal bankruptcy.
But that aside, i have no clue on whether Klarna is making a smart move. But i assume they are because companies that are both evil and stupid don’t tend to come far.
Eh, I dunno about that last point. “Evil” is a pretty OP strategy if you have the stomach for it, usually leaves lots of room to survive doing dumb shit. And hot DAMN greed is good at convincing people to do dumb shit!
On the one hand, don’t underestimate their cunning, I do agree with that. But on the other, I’ve never liked the “4D chess” assumptions some folks are so willing to make (not meaning you here), it’s unwise to overestimate it, too.
“Evil” is a pretty OP strategy if you have the stomach for it
I think they do have the stomach for it. And also smart enough to get away with conning people, to know how to not get in trouble with lawmakers, do that fine print just right etc. They act as if they are helping people by offering easy credit while they know they’re not earning money from people who can easily pay them back. They profit off the least capable to keep their finances in order, living of the weak and vulnerable like parasites do.
Hard agree.
Klarna is a thing in Germany as well and personal bankruptcy absolutely is a thing here [https://www.verbraucherzentrale.de/wissen/geld-versicherungen/kredit-schulden-insolvenz/privatinsolvenz-in-3-jahren-schuldenfrei-11417] so I don’t know if your second point is that relevant. I’d agree on the first one though.
Serves me right for assuming Germans had a similarly judgemental attitude to people who have ruined their finances. Thanks for the correction.
Finns often have a very puritan attitude to debt (you should fear it like the devil), and in the common discussion it’s often attributed to the ethics of the Lutheran church. That’s at least partially the reason we still don’t have a real personal bankruptcy option. Somewhat surprising to me that a country that shares that value system could be that forgiving to people – I’m a bit envious even 😅
Around here Klarna and other similar companies have long been seen as exploiting the fact that debt is really difficult to get through proper sources, and there’s a matching draconian bunch of collections agencies to support that business model. We’ve mainly been trying to tackle this by regulating the process of giving out loans, instead of giving people the necessary way out and thus giving the corporations an incentive to self-regulate.
If bad credit is actually no longer possible to collect on, it ceases to be good business. Hats off to Germany for having a proper route out of predatory loans.
I german but still hate debt. Why buy something pay off later? Why not just save up monthly then pay once? Same process, same result, 0 fee.
Is there a good article about this?
I’ll try to find some and link, but I’m not sure if there are good ones.
Edit: couldn’t find one with quick googling. Guess I’ll have to write one when I have time.
Rent money to rent apartment
Great idea
How much later? Can I get 50 years on that cause I’m gonna take that option.
Sell 100-year bonds to Klarna and use the money to pay your installments.
Financing is bad at the best of times.
No, it’s not. Financing is a great tool, and used wisely and with knowledge of interest rates and total cost, can elevate you quite a bit in life.
This however is predatory lending, and it should not be used ever.
Predatory lending in the vast majority of developed economies other than the US:
Adjustable rate home mortgages being issued to financially illeterate people without extremely clear and emphasized risks and disclosures.
Same thing with HELOCs.
Vehicles loans with rates over 15%.
… subprime lending basically just is predatory lending that we don’t legally call predatory lending.
Oh and then of course there is the entire system of Private Credit Shadow Banks who issue trillions in loans to all kinds of business entities, who basically aren’t required to do anywhere near the level of accounting rigor or transparency that actual banks do.
We just basically don’t regulate them.
Care to explain? I got raised differently and avoid financing like the plague, but I’m coming to the realization that I won’t be able to do that forever.
How do you think it can be a net positive? Your insight might help me cope.
Others have said it here better than I could, but I was the same way but for probably other reasons. My mother lost her home, not due to misfortune but because she couldn’t manage her finances. Quick splurge items and random ideas too priority over long term stability. Anyway, so I thought mortgages and loans were scary too.
Then I got educated on them. They’re not scary if you understand what you’re doing. Loans are not scary, they are tools to achieve your goals. A tool can be extremely useful to accomplish your goal, but you also shouldn’t reach for that tool every time either.
If your goal is to own your home, a mortgage is a great tool if you know what you’re doing. Learning about interest rates, how they’ll affect you, sitting down and looking at your long term finances and knowing what you can manage paying every month for the forseeable future is how you can calculate what works for you.
Where it gets scary is when people walk in, not knowing what they can afford and taking everything the bank will give them, not knowing how much they’ll be paying over time. That’s when things get predatory and scary. Knowledge is power as they say.
Now when I need a loan I go in, and I know what interest rate I want, what duration I want, and exactly how much I need, and the bank usually says yes. I’ve proven myself with my credit score to be a trustworthy person to lend to, and l can now usually get pretty decent terms.
Learn about finances, learn the math, and learn how you spend money. Once you get that knowledge it stops being so scary.
The other scary things with financing is people who struggle to live within their means and people using it for emergencies when they struggle to make ends meet.
Personally I follow the rule I was taught: only use financing for housing, vehicles, and education, each of which should be evaluated to be within your means and benefitting your life.
Debt is a chain, it can bring great advancement such as homeownership or a desired career, but it binds you for its duration and it’s an awful experience. I hope someday to be debt free, but it’s financially stupid to pay off my student loans right now when a mutual fund has more return on investment. I still like to put a big chunk in for special occasions when I can
I bought my first apartment when interest rates were around 1% (the 2010s were wild). I paid 30% less every month to the bank than a comparable rent, utilities excluded in both.
On top of that, the payment was 40% interest and 60% went towards the principal, so basically investing.
To put it in numbers, imagine the apartment you like is 1000 euros a month in rent. You decide to buy. Now you pay 700 euros to the bank each month, of which 300 is interest and 400 is paying down the loan, so you will probably get it back if/when you sell it. You “lose” 300 euros am month instead of 1000.
Another example, buying a car to go to work (or any other tool). If you don’t have cash but need a car, getting a loan and being able to work is better than not having debt but being unable to work.
Think buying an apartment on credit vs renting it. The apartment bought on credit you’ll eventually own, but not the rented one. So assuming you need an apartment, buying on credit can easily be the better decision.
This is a financially naive and reductionist take, approaching financial illiteracy. Applied correctly, financing allows you to preserve liquidity while still leaving funds in accounts with higher returns. Financing also provides a hedge against inflation, e.g. real estate.
Financing also literally causes or just is monetary inflation, in a debt-based fiat currency system.
Those with access to credit leverage it and prosper roughly proportional to their level of credit access, those without access to it pay the inflation tax and suffer.
This is why capitalism has bubble/pop cycles, inherently, systemically, unavoidably.
When your home is functionally your own personal bank, you want home values to keep going up… which necessarily causes less people to be able to afford homes, and in a society based on access to credit being necessary to ‘buy’ a home, this creates and exacerbates a class divide.
(You really haven’t ‘bought’ your home untill you’ve fully paid off the mortgage, untill then you’re more or less doing a complex rent-to-own from the bank.)
Its also why you get ‘too big to fail’ banks and other entities… they have a bunch of bad debt, and if they are forced to actually account for it, well that would mean so many write offs that it would massively decrease the money supply, which is a recession/depression.
The same dynamic is at play with college costs.
More financialized, more loans? Prices go up. Less people can afford college, or in our lovely system where student loans are not dischargeable in bankruptcy, more people become literal debt slaves.
Same dynamic is also at play with vehicles, cars.
… real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable.
If that’s your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can’t afford super-inflating home prices.
Super-inflating home values is the Boomers climbing a ladder, and then once they’re on top of it, constantly pulling that ladder higher, further and further away from the ground, from all their kids.
If that’s your inflation hedge strategy, you must understand that mass broad usage of this strategy actively causes the impoverishment of those who can’t afford super-inflating home prices.
And yet an individual has to “play the game” to avoid falling into poverty. I’m not sure what else could be done here. Anyway, privilege begets privilege beyond all else, and at the end it’s mostly luck of the draw.
I’m not sure what else could be done here.
Reform or overthrow the system instead of participating in it to the detriment of others.
Start or join a housing co-op.
Do something to alleviate the harm, or provide an alternative system.
If you have enough assets/credit to consider getting a home mortgage, you have enough assets/credit to make a meaningful difference.
No more excuses.
In a broken system, doing good, being moral, has costs, is difficult.
Instead of leveraging your privelege to increase or sustain your privilege, leverage it toward effective change.
“I don’t know what else you’re supposed to do” is why the machine keeps grinding everyone to death, is why more and more people become homeless, is ultimately why the planet’s climate is now fucked beyond repair and we can now only attempt to cope with the now unstoppable changes that are coming.
You understand what you are doing by participating in the system, therfore, you either condone it, or you’re a hypocrite.
I wish I had the capital and time to try to fix the system. I’m not rich, I have to work to pay the bills and mortgage. I do understand my relative privilege and so try to do good where I can. I’m involved in 3 charitable organizations locally. We help feed and house lots of people. We bring clean drinking water to desperate populations elsewhere. I raise more money doing this than I could by taking my salary and directly spending it to fix an entire system. So, am I still a hypocrite? Boolean, absolutist thinking actually hinders progress.
I completely agree with everything you said, both in this response and your response to Scrubbles. I also appreciate your long-form responses in both.
This is, however, the system in which we live. There is no ethical consumption under capitalism. Choosing to pay cash for big ticket items, real estate, and durable goods when other accounts/portfolios earn more interest than the financing… that’s just throwing money away. If your laddered certificates accounts earn >3.5% and you can get 0% or 1% automobile financing (and you need a vehicle where you live), I don’t think anyone would choose to burn that much liquidity.
You really haven’t ‘bought’ your home untill you’ve fully paid off the mortgage, untill then you’re more or less doing a complex rent-to-own from the bank.
Agreed. My options where I live are primarily rent or mortgage; there are intentional communities with equitable arrangements, but the waitlist is 5 to 10 years. And with rents here going up at about 8% to 12% per year, I chose the 3.7% mortgage. FWIW, most home sales in my area are industrial investors or second homes, which absolutely underscore your points regarding livability, financial violence, and <waving around> all this shit in which we live.
real estate is only a hedge against inflation in a society that is stratifying, becoming more inequitable
Again, fully agreed. Inflation is here. None of us are going to wish away inflation or predatory lending, because primate brain and “they” have our number. If one has interest rate arbitrage available, using it prudently leaves more disposable income, and therefore more time to strive for more equitable systems. For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won’t surprise you at all: it’s my most used offer (>100 hours used) and the number of people lacking these skills… it’s almost like this system is designed for a certain scope and scale of financial ignorance.
For example, I am the treasurer for my regional timebank, and among my offered services are financial literacy, budgeting, and household bookkeeping. This won’t surprise you at all: it’s my most used offer (>100 hours used) and the number of people lacking these skills… it’s almost like this system is designed for a certain scope and scale of financial ignorance.
Well hey, you’re actually doing some effective harm mitigation and working to provide a framework of alternatives!
That is actually commendable, I tip my proverbial hat to that.
I used to work at a nonprofit serving the homeless and at risk of becoming homeless… after enough years inside a few Fortune 500 companies showed me the true extent of the horror.
Sadly I got badly maimed and am almost a year into full time at home physical therapy… progress is real, but slow.
Had to move to the middle of nowhere to find somewhere I could afford to rent off of just SSDI.
But anyway, yes, it is very much obviously intentional that we have a lack of financial literacy and at this point just general literacy:
The Republicans have been doing everything they can for my entire lifetime thus far to destroy public education, and it is working.
I literally took out a mortgage to buy my house. That’s financing.
If I lose my job and I’m not able to find another one then the bank will repossess my house, but that doesn’t make my purchase of my house a financially irresponsible decision. The repayments on my mortgage are considerably less than the rent that I used to pay, so I am much better off now than I was previously. Anyway I would have lost my rental had I stopped paying as well, so nothing’s really changed.
