Loans in Dungeons and Dragons
por Chux
Hi everyone,
The other day I was reading the Traveller Core rulebook (Mongoose Publishing) – specifically the section about ships operations – and I was amazed by the level of detail some of the rules have. The rulebook assumes that most of the players will want to own their own ship, but that it is very unlikely they will have all the money to buy it on their own. Thus, the system offers several rules to allow players to buy used ships, while also providing guidelines to estimate the amount of the monthly payments.
This topic quickly caught my eye, since it is a recurring theme (cliché?) in Sci-Fi books and movies: a group of adventurers struggle to get a ship of their own, so they can leave their home planet behind and find fame and fortune among the stars. In the end, most characters end up either (a) they gamble away everything they own, hoping to catch a lucky break (b) they steal it from someone or (c) they get a loan to buy an old vehicle.
The financial analyst hidden deep down inside of me, automatically stated making calculations based on the info provided in the rules. According to them, the monthly installment for a ship is calculated by diving the total value of the spaceship by 240. The result is the recurring payment the character must make for the NEXT 40 YEARS!! Although I was initially shocked by this, when I estimated the actual interest rate, it ended up amounting to only 4% per year, an extremely low interest rate for such a risky loan. Thus, I decided to update the ratios to get them closer to reality.
Realistic Interest Rates
The first step in estimating the ratios was defining a framework for the data. Whenever you are talking about loans and interest rates, there is a large number of variables that can move your end result, but since this is supposed to be for an RPG and not a grad level finance class, I decided to keep things simple.
1- I had to choose 3 economies as points of reference: a country with a strong economy, a country with a stable economy, and a country with an erratic economy. Since I am more familiar with the overall economic conditions in the Western hemisphere, I chose the following countries::
| Strong economy, low interest rates | United States |
| Stable economy, average int. rates | Mexico |
| Struggling economy, high int. rates | Argentina |
(Note: these countries are just points of reference in 2019, and can be adjusted/changed if necessary)
2- For each economy, I would look up information on 4 basic types of loan:
| Loan Type | Main use |
| Home | Buy a house or residential lot |
| Automobile | Buy a new car |
| Personal | Consolidate debt, special events/occasions |
| Credit Cards | Wants (luxury or superfluous items) emergencies, impulse purchases |
3- The interest rate for each loan would be simulated assuming an individual with an average credit score.
4- Finally, I would assume the following terms for each loan:
| Loan Type | Term |
| Home | 30 years |
| Automobile | 5 years |
| Personal | 3 years |
| Credit Cards | 1 year |
After digging around in the internet for a couple of minutes, we came up with the following data:
| Loan Type 2019 | USA | Mexico | Argentina |
| Home | 5% | 12% | 35% |
| Automobile | 12% | 18% | 60% |
| Personal | 20% | 30% | 95% |
| Credit Cards | 30% | 60% | 150% |
Loan Ratios
With this data, I estimated some quick ratios for each calculation, using the same logic presented in the Traveller rulebook (you can find the calculations here) :
| Loan Type | USA | Mexico | Argentina |
| Home | 190 | 100 | 35 |
| Automobile | 45 | 40 | 20 |
| Personal | 25 | 20 | 10 |
| Credit Cards | 10 | 9 | 5 |
How do you use these factors?
Easy!! Lets assume you want to buy a $ 200,000 usd home (no down payment just to simplify all calculations). To estimate the amount of your monthly payments, you just need to divided the value of the house by the factors provided above:
| USA | $ 200,000 / 190 | $ 1052 |
| Mexico | $ 200,000 / 100 | $ 2000 |
| Argentina | $ 200,000 / 35 | $ 5714 |
This is a quick, simple way to estimate monthly payments for a loan, without having to understand all the financial logic behind it
And why would I need this for my Dungeons and Dragons game?
Although in a lot of campaign, PCs walk across the countryside with thousands of gold pieces in their backpacks, many DMs forget that most folks have to survive with limited resources.
How limited?
Well. If we take “Lifestyle expenses” found in the Players Handbook as a reference, the estimated average income for NPCs in a medieval setting would be as follows:
| Lifestyle | Est. Monthly Income (gold pieces) |
| Wretched | 0-2 |
| Squalid | 3-5 |
| Poor | 6-20 |
| Modest | 30-50 |
| Comfortable | 60-100 |
| Wealthy | 125-250 |
| Aristocratic | 300++ |
If we assume that (at a WW level) people spend on average 80% of their salary, the amount of disposable income they would have per month amounts to:
| Lifestyle | Disposable Income |
| Wretched | 0-3 silver pieces |
| Squalid | 6-10 silver pieces |
| Poor | 1-4 gold pieces |
| Modest | 6-10 gp |
| Comfortable | 12-20 gp |
| Rich | 25-50 gp |
| Aristocratic | 60++ gp |
This means that, even in someone is classified as “wealthy” they would have to save some money before buy a Plate Mail. Imagine the amount of work it would require someone with a lower income. Thus, it is very likely that, if players want to begin their adventure fully equipped, they will have to get a loan.
Loans in a fantasy world
Before we can calculate ratios for a fantasy world, we need to adjust the 4 types of loans we detailed in the previous section, to something more akin to a fantasy world:
| Loan Type | Use |
| Property (Home) | Buy land or a house |
| Work equipment (Automobile) | Horses, Mules, Wagons, Heavy armor |
| Personal | Weapons, Medium and Light Armor, Basic healing spells/potions, basic spells |
| Emergency (Credit Card) | Unforeseen expenses, advanced spells |
Furthermore, we need to translate our 3 reference economies into something we can use in a fantasy setting:
- Strong Economy = Prosperous kingdom during times of peace, with kind, benevolent rulers
- Stable Economy = Kingdom in a post-war era, recovering from difficult times or a Kingdom with rulers who are more focused in having a good time, rather than helping their people prosper
- Struggling Economy = Kingdom in the middle of a war or a Kingdom with a tyrannical ruler
With this information, we could translate the factors into something usable in a D&D campaign:
| Loan Type | Prosperous Kingdom | Post-War Kingdom | War period / Tyrannical ruler |
| Property | 190 | 100 | 35 |
| Work Equipment | 45 | 40 | 20 |
| Personal | 25 | 20 | 10 |
| Emergency | 10 | 9 | 5 |
Example: Level 1 Paladin
To show you how we can use the data, lets assume we have a level 1 paladin who wants to be fully equipped: Plate mail armor, a good sword and a warhorse (with a chain mail barding and a military saddle). This young, optimistic adventurer would have to make the small investment of 2,235 gold pieces for his equipment.
| Plate Mail | 1,500 |
| Long Sword | 15 |
| Warhorse | 400 |
| Barding and Military Saddle | 320 |
| 2,235 gold pieces |
Assuming the kingdom he currently lives in is at war, and the loan he requested is for “work equipment”, he would have to make monthly payments of 2,235 / 10 = 223 gold pieces for the next 5 years. I am sure the player will be super excited of having a fully equipped character. I just hope that optimism last until after his first payment.
If you want to complicate things furthermore, you can assume that for every missed payment, the loan shark/bank will add a penalty equal to 50% of the overdue payment oto the total debt, and enough payments are missed, he/she will send a group of henchmen to “motivate” the PC go catch up with his payments. I am sure this rule can add some interesting twist and turns to any campaign.
I hope you enjoyed the article. If you want to see the whole set of calculations, you can download the Excel spreadsheet here, and if you have any questions, feel free to write us to admin@thedeathdieclub.com.
See you next time!!
