A tipster (send in your tips here) sent in this interesting article from NBC Sports about NFL players being an attractive target for bridge loans to get them over their current financial desert while they wait for contract talks to be fruitful.
The article states NFL players are being targeted with interest rates as high as 22 percent and says, “It’s almost predatory lending. It’s people going to guys who they know are already in debt, or don’t have the ability to pay their bills during the year and [lending them money] at such obscene terms, that you say, ‘Hey, no one would ever sign something like this.’ But a lot of players are.”
I’m not saying 22 percent isn’t a high interest rate but maybe these players have forgotten what it’s like out here in the real world. A rate of 22 percent isn’t predatory, that’s typical. Predatory would be what your credit card charges you for a cash advance.
“I know at least 16 different teams that have had players go out and have to set these [high risk loans] up,” an unnamed financial advisor told ThePostGame.com. “Guys on the Dolphins, Saints, 49ers, Panthers, Chargers, Bears, Vikings.”
“Sounds like total B.S.,” Cardinals kicker and NFLPA representative Jay Feely told ThePostGame.com. “I think it’s predatory and unjust. I don’t think they should be charging those interest rates and I would encourage every player [considering high-risk loans] to look elsewhere. I think if you went to your bank, or outside lending agencies, you’re not going to pay that kind of interest. That’s absurd.”
Actually, it’s really not that absurd based on guys that may not have strong credit histories, not much collateral and are out of a paycheck for now.
These guys might just as well apply for a loan from LendingClub.com before the cash crunch gets too tight. Otherwise before you know it you’ll have some players at payday lenders and pawning the last ring to make the next payments.
And as far as the cry that once the strike is over players will have to repay the loans with a lot of cash to repay the debts, please. A three month cash loan that only costs 22 percent is not a curse, it’s a blessing when didn’t have other resources to fall back on.
But bottom line, even NFL players need an emergency fund or savings account to help them through tough times so save all you can in good times boys. You never know when you’ll be financially blindsided or out of work.
And let’s not get distracted by this recent turn of events. NFL and NBA players are still among the worst money managers. A couple of years ago it was reveled that 78 percent of players within two years of leaving the game are bankrupt or under financial stress.
The lockout is the least of the issues for players, it clearly appears planning for the future is of utmost importance.NFL Players Targeted for Predatory Loans to Get Them Through Lockout by Steve Rhode