You may have seen these things, I get a couple a month. A check arrives in the mail. Sometimes it’s an actual negotiable check, or if not it’s a binding voucher of some kind. It’s for a large sum of money, made out to me. If I cash it, it turns into an unsecured loan. I’ve always been curious why everyone wants to loan me $5000-$8000 without security.

I always shred these, since I don’t need any more debt. But I can imagine getting one of these and saying “Okay, I sure do need five grand right now” and cashing/redeeming the thing.

I looked at the latest one more carefully. The “check” is bilingual; they sent it to me Spanish side out. It’s for $6,000.95 (love the 95 cents). I can redeem it at any HSBC office. I have then taken out a loan for this amount at 29.980% APR. Because we still have some vestiges of government they have to tell me this in bold type, and also tell me my payments, how many payments there will be, and the total finance charges. This is a five year loan with monthly payments of $194.08 and:

The total finance charges are $5,643.85.

So that’s why they’re happy to loan that much.