For every $100 loaned to consumers via same day loans, a 15 to 25 percent fee is added for the convenience. In most cases, this means the consumer repays $50 or $60 on top of the principal balance of the loan. But the larger dollar amounts involved in NFL “lockout loans,” a phenomenon spawned by the 2011 NFL lockout make such instant payday cash advances a more severe matter, despite the income disparity. Players out of cash due to the labor dispute are being solicited by lending agents. Source for this article – NFL lockout loans: More money, more problems by MoneyBlogNewz.
Lockout loans: When 36 percent APR is dangerous
There have been lockout loans of $60,000 made with a 36 percent Annual Percentage Rate which ads up very fast. The $300 and $400 customer same day loans don’t make nearly that much interest on 36 percent Annual Percentage Rate. Yet players from at least 16 NFL teams have already applied for such large-scale instant cash advances, writes Yahoo! Sports.
The NFL Players Association lockout fund has helped some players, but clearly the response to high-risk lockout loans indicates that some players haven’t curbed their extravagant lifestyles in the absence of their paychecks. Hardly any players listened when the National Football League Players Association advised players to save three game checks. This was given as advice to players in preparation of the 2011 lockout. In addition, the National Football League Players Association has urged players to refinance their homes, fly coach and pursue moneymaking opportunities like autograph signings and speaking engagements in this extended off-season, writes MSNBC.
Wasted funds with NFL players
Sports psychologists suggest that star athletes are surrounded by enablers from a relatively young age. By the time players reach the professional ranks, it is not uncommon for them to lack real world financial knowledge, as they’ve never had to take responsibility for such things. Millions being given to someone who was poor might also be an issue. These individuals might just spend it all up. This is perhaps why as much as 80 percent of retired NFL players have declared bankruptcy, according to a Sports Illustrated estimate. Of the 1,700 players in the NFL, 380 of them are anticipated by MSNBC to be living paycheck to paycheck. This is despite the fact that $1.87 million was the annual salary for NFL players in 2010. Players who spend too much can have lots of problems, after taxes and agents, especially since rookie averages were at $320,000.
A dissenting voice in support of lockout loans
Yahoo! Sports spoke with NFL athlete financial adviser Sherard Rogers who said the lockout loans are a great product. While franchises will endure, players who live to spend can run into trouble.
“Every NFL team was valued at over $1 billion, so they can weather the storm of a lockout. But could players if there weren’t resources to cover this short-term labor dispute?” asked Rogers. “The key is to figure out how to solve the short-term liquidity issue and put the pieces in place to ensure they don’t have this liquidity issue again.”
Information from
MSNBC
msnbc.msn.com/id/41855264/ns/business-personal_finance/41855226
Philly Sports Column
philly.sportscolumn.com/showthread.php?t=11751
The Real Athlete Blog
accessathletes.com/blog/blogDisplay.cfm?/Education-is-Key-for-Pro-Athletes-596
The Post Game
thepostgame.com/features/201104/tpg-exclusive-cash-strapped-nfl-players-seeking-high-risk-lockout-loans
Both sides are feeling the ‘deal heat’
youtu.be/CQD7MvhD3sI
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