No penalty for endless loans? Hello?? RE: quill18's

[unmerged(148355)]

I was just watching Quill18´s Lets Play EU IV as England and well at this point he has taken out 9 loans (it's year 1450), yet his stability is at +1 and everything seems to be going quite nicely.

I have to ask this... can you just take out loan after loan? It seems like this way you don't even have to pay attention to anything because your funds are endless and there is little to no penalty or consequence. Unless I'm missing something here, this is a game-breaker isn't it?

What exactly is the downside then? Can someone please explain?

:angry:


I mean what's the point in trade and maintenance and planning if you could instead just do whatever you want and keep taking loans...

 

[unmerged(773066)]

Loans incur inflation and interest, you can take a whole lot of them but if your interest rates surpass your income you're bankrupt and then bad things happen because you're a bad person and you deserve bad things happening to you.

 

[Nilmerf]

It's sort of like minting in EU3. It's not good for your economy or inflation, but you may need a little of it now and again. If you interest exceeds your income, however, you will go bankrupt, which is bad news.

 

[unmerged(148355)]

I know that what you're saying is supposed to happen, but it doesn't seem to actually be enforced. Like I said, in his game there doesn't seem to be any consequence to the compounding interest because he can just take ANOTHER loan.

That's what I don't get.

 

[Pelican Sam]

From playing the demo I noticed that the interest on each loan you take out is spread out over five years so that it directly effects your monthly income. That's why if you take a loan out and immediately try to pay it back, you have to pay back whatever the amount was that you borrowed plus the full interest. However if you wait the five years you only have to pay back the initial amount you borrowed, as the interest has been paid off over the period of five years.

Therefore, taking loans directly affects your economy on a month-to-month basis, as well as increasing your economy's inflation. Now I have no experience with the inflation mechanic so I don't know what exactly it's affects are over the long term, but taking loans does have an impact on your money, it's just not a jarring impact that can end your game.

 

[ariantes]

There is a maximum number of loans you can take. And each loan increases your inflation. And if you can't pay back a loan when it becomes due, it gets rolled over with a higher interest rate (and the rolled over loan increases inflation again).

 

[DaveDash]

Is it just me or are people really poor at listening these days?

I think Quill18 mentions about 10 times in his videos that taking out loans are equivalent to MINTING.

If you look its BY DESIGN. You can take up to 90 loans out at a time. I think he had about 10-15 loans out, so, in EU4 terms that is not a lot.

Just remember though that the interest on those loans goes up every time you cannot pay them back, so things will spiral out of control eventually. He eventually seeks peace to try and get his WE and loans under control.

 

[Apelstav]

I know that what you're saying is supposed to happen, but it doesn't seem to actually be enforced. Like I said, in his game there doesn't seem to be any consequence to the compounding interest because he can just take ANOTHER loan.

That's what I don't get.

And eventually his economy will crash and inflation will be higher than the sky, since the drain upon his economy will rise with every loan.

 

[benice1234]

And eventually his economy will crash and inflation will be higher than the sky, since the drain upon his economy will rise with every loan.

And then a Communist/Fascist revolution will occur.

 

[unmerged(148355)]

And eventually his economy will crash and inflation will be higher than the sky, since the drain upon his economy will rise with every loan.

What's the result of that? I mean what are the penalties you get and also what stops you from just taking 10 more loans? I know inflation is bad and I know interest is bad but it's only bad if you can't just take another loan to cover it like some neverending ponzi scheme.

This is like if you go to college for 4 years, have like $70,000 in student loans, and you just go to the bank and ask for $80,000 to pay those back, then go again for $80,000 and they just keep giving you more money. THat's completely ridiculous!

 

[Apelstav]

And then a Communist/Fascist revolution will occur.

Surely the Marxist-Leninist Empire of the German Nation will into space!

 

[knul]

The obvious drawback of loans, like in real life, is that they cost money (interest). In EU4 (like in real life) this will not be a problem as long as you invest that money so that your earn more money back than the loan costs in interest. But as soon as your investments go bad...

 

[unmerged(148355)]

By the way, I didn't make this thread as a way of complaining about the new game or anything. I'm trying to understand a fundamental game concept, one that seems to be a bit out of control and just extremely overpowered.

 

[DaEvilNome]

What's the result of that? I mean what are the penalties you get and also what stops you from just taking 10 more loans? I know inflation is bad and I know interest is bad but it's only bad if you can't just take another loan to cover it like some neverending ponzi scheme.

This is like if you go to college for 4 years, have like $70,000 in student loans, and you just go to the bank and ask for $80,000 to pay those back, then go again for $80,000 and they just keep giving you more money. THat's completely ridiculous!

Download the demo and give it a try.

 

[jcinq4]

I'm sure you won't be able to take any more loans after a while, and when you can't take any more loans to pay for your loans, you'll go bankrupt.

 

[unmerged(773066)]

What's the result of that? I mean what are the penalties you get and also what stops you from just taking 10 more loans? I know inflation is bad and I know interest is bad but it's only bad if you can't just take another loan to cover it like some neverending ponzi scheme.

This is like if you go to college for 4 years, have like $70,000 in student loans, and you just go to the bank and ask for $80,000 to pay those back, then go again for $80,000 and they just keep giving you more money. THat's completely ridiculous!

A Loan costs more to pay itself off than the money you receive from the loan while incurring Inflation, so by taking Loans for Loans you're paying for more with less just to pay more. It's not sustainable.

 

[unmerged(148355)]

The obvious drawback of loans, like in real life, is that they cost money (interest). In EU4 (like in real life) this will not be a problem as long as you invest that money so that your earn more money back than the loan costs in interest. But as soon as your investments go bad...

? as soon as they go bad what? There doesn't seem to be a consequence that can't be easily dealt with by simply taking out another loan from a seemingly endless supply of money-growing trees.

 

[unmerged(148355)]

If you look its BY DESIGN. You can take up to 90 loans out at a time. I think he had about 10-15 loans out, so, in EU4 terms that is not a lot.

Why in the world would anyone keep giving you loans when there are previous loans you haven't paid back?

None of economy deficits you get from interest and inflation matter at all if there's an endless supply of loans that you can just continue to drain until you basically win the game before you hit some kind of a limit to them.

 

[unmerged(773066)]

A Loan costs more to pay itself off than the money you receive from the loan while incurring Inflation, so by taking Loans for Loans you're paying for more with less just to pay more. It's not sustainable.

Again. And it's not endless, there's only so many you can have at a time. If you're good for it, you can keep borrowing it. If you're not good for it, the game kneecaps you by whacking your stability, prestige, revolt risk and international opinion. Harshly.

 

[knul]

? as soon as they go bad what? There doesn't seem to be a consequence that can't be easily dealt with by simply taking out another loan from a seemingly endless supply of money-growing trees.

I mean, as soon as your income cannot cover your interest, you're bankrupt. In the game there is a limit to the number of loans you can get: at some point you cannot loan more money to cover your interest.

In real life, as soon as you're starting to get loans just to pay interest, you better file for bankruptcy, as it won't take long for that you are forced to do so.