Point 2 means 20 percent I think. As in "x.2".... Point 5 would be fifty percent, and so on....

Mick

The "Two Points" Ralphie is talking about means an interest rate of two per cent per week on the outstanding balance.

Artie would be paying $1000 a week in interest, and even after a year, having paid $52,000 in interest, would still owe Ralphie the original $50,000.

That is exactly right. What many Loansharks do is let's say you borrow $10,000. The loanshark may tell you that you must pay him 2 pts. per week or $200 per week and then when you go to pay off the original loan you must pay back $12,000. If you
take ten weeks before coming up with the $12,000 you have paid $2000 over ten weeks which never comes off the top and then the original $10,000 +
another $2000 in interest for a total of $14,000 over ten weeks on a ten thousand dollar loan! Hmmm, not a bad profit!

Don Cardi

You bet! In George V. Higgins' splendid novel, "The Digger's Game," the title character owes money to a loanshark and tries to get his brother, who's a Monsignor, to give him the money so he can pay off the shark right away, and thus not wind up paying the "vig" forever. The Monsignor, who's naive about these things, says, "How much time will he give you to pay up?" The Digger replies, "Time? He'll give me the rest of my life."

Two per cent per week, BTW, would be considered a "good" rate from a loan shark. Almost a "wholesale" rate.

A Captain, let's say, might gave money to his crew members for 2%, and they would loan it out on the street at 5 or 6%.

And the more desperate the borrower, the higher the rate he would have to pay. Artie, who wanted to borrow the money for a business venture, but wasn't compelled to borrow it, might get a lower rate than Dave Scatino, who, in effect, borrowed the money at the card game. Once he owed it already, he was in no position to negotiate rates.

Just a little extra info, Knocc Out: The original money he owes is the "principal." The interest is called the "vig", short for vigorish.

Also, am I right in thinking that it is 2% vig for each week that goes by? I.e., the percentage interest is constant, but with the vig added to the principal each week, the interest of that also has to be paid, but as the principal is now up, the interest of that goes up, so in effect you actually own more than what you did last week?

Mick

Generally, the interest is paid weekly.

There could be a case when the borrower is unable to meet his interest payment in a particular week now and then, so in that case the unpaid interest would be added to the principle amount owed, thus increasing the interest owed the following week.

But, in general, the loanshark prefers the steady weekly income.