Any Stories About High Interest Loans?

[xerostar]

My wife told me about a neighbour who borrowed money to buy a car.

I asked her how much interest do you pay in Thailand?

She said 4%. I replied - "Oh that's very reasonable, 4% per year!"

Then she said "Oh no - 4% per month .. and the money lender takes a mortgage over their land as security.

48% per year - OMG! How do people fall for this?

I met a German guy who was telling me quite proudly that he was making good money

and aquiring blocks of land when people defaulted on payments.

I find this disgusting and immoral, charging outrageous interest and then grabbing land off

poor Thai people.

[midas]

My wife told me about a neighbour who borrowed money to buy a car.

I asked her how much interest do you pay in Thailand?

She said 4%. I replied - "Oh that's very reasonable, 4% per year!"

Then she said "Oh no - 4% per month .. and the money lender takes a mortgage over their land as security.

48% per year - OMG! How do people fall for this?

I met a German guy who was telling me quite proudly that he was making good money

and aquiring blocks of land when people defaulted on payments.

I find this disgusting and immoral, charging outrageous interest and then grabbing land off

poor Thai people.

I agree with you xero! Is it any wonder the Thai's want to restrict ownership

of land to foreigners when you hear about shisters like this guy ? I hope the german

gets the kharma he dserves

[larvidchr]

I think almost every village has its private moneylender, and at very high interest, it is a big problem and the government have tried to reduce it by offering cheap loans to farmers.

It is in fact illegal but i dont know if they ever procecute any, maby others on tv knows.

[blizzard]

peple

this is not a thai thing.

in usa we have pawn shops that prey on poor people. if dude dont pay cars get taken, jewelry is taken,etc.

also in usa we have copanies who make short term loans on peoples paychecks, interest rates quite high.

the guys is doing legitimate business if he is aquiring land if people default on their loans. if he cut theirm arms off i might have a problem.

the moral is its tough to be poor. and it tough to be rich. and it tought to be in the middle.........lol.

[GuestHouse]

The problem is not restricted to the rural poor. I've had to deal with staff who have got into similar debt problems, unlike their rural cousins the urban debtors tend to have bank/credit card/hire purchase and then money lender debts.

Also the money lender thing is a lot less structured than we might expect. Very often Thais will lend their friends money at extortionate rates.

[chevykanteve]

Four (4) percent per-month interest? She's getting off cheap compared to some of the money-lending operations going on in Roi-et Province. Is there an official Thai government telephone number available to complain about such matters? Seven-hundred (700%) percent (annual, and NO PRINCIPAL INCLUDED) is not unheard of from Thai-Chinese money lenders in amphur muang, Roi-et. And again, is there a government telephone number to which complaints may be lodged? Or an international NGO who will publish such complaints??

And how about goverrment (civil servant) workers for government-related lending institutions who use their offices to make equally obscene loans ON THE SIDE for lining their own pockets?

Non-government organizations who are interested in this sort of thing: post a message if in fact you think you can help. I know many people caught up by the loan-sharking of the aforementioned ...... Mafi- (guess the last letter!).

[bendix]

Frankly, I can't see what the problem is. So long as those interest charges - and the implications of defaulting - are made clear before the loan is taken out, surely it's not an issue for anyone other than the lender and the loanee to get involved in.

It's called individual responsibility. It's a curious thing but when we reach adulthood, we're meant to acquire some.

[kmart]

Frankly, I can't see what the problem is. So long as those interest charges - and the implications of defaulting - are made clear before the loan is taken out, surely it's not an issue for anyone other than the lender and the loanee to get involved in.

It's called individual responsibility. It's a curious thing but when we reach adulthood, we're meant to acquire some.

Agreed in principal. However, the long-term outlook for a lot of locals doesn't seem to go beyond tomorrow afternoon, and then when you get off-duty cops and soldiers working as enforcers and debt collectors, the plot thickens somewhat.

[bendix]

Agreed in principal. However, the long-term outlook for a lot of locals doesn't seem to go beyond tomorrow afternoon, and then when you get off-duty cops and soldiers working as enforcers and debt collectors, the plot thickens somewhat.

Well, there are obviously a fair number of significantly more savvy locals who DO have a longer term outlook - they are the ones giving the loans and making the money. And good luck to them.

Dog eat dog, social darwinism and all that stuff.

You can't legislate to save the ignorant from themselves, I'm afraid.

[chevykanteve]

Frankly, I can't see what the problem is. So long as those interest charges - and the implications of defaulting - are made clear before the loan is taken out, surely it's not an issue for anyone other than the lender and the loanee to get involved in.

It's called individual responsibility. It's a curious thing but when we reach adulthood, we're meant to acquire some.

Don't you feel that answer is just a bit insensitive.... perhaps even pompous? Is "individual responsibility" practiced by more than 10% of the populus here? I daresay, NO! And for those remaining 90%, well, let them eat cake!

[bendix]

Don't you feel that answer is just a bit insensitive.... perhaps even pompous? Is "individual responsibility" practiced by more than 10% of the populus here? I daresay, NO! And for those remaining 90%, well, let them eat cake!

Insensitive? I don't know. Frankly, whether it's insensitive or not is irrelevant. It doesnt stop it from being true.

As adults EVERYONE (unless they are handicapped in some way) should be accountable for their own lives, including their successes and failures. I don't see what's wrong with that as a philosophy as life.

No, I don't suppose more than 10% of the Thai populous are that way inclined. Further, I think even fewer in the nanny societies in the west are that way inclined - everything is always someone else's fault. If they get into debt, I hear people whine, it's because the banks made it so easy to borrow. <deleted>? If they get fat, it's because fast food companies make their burgers too tasty. <deleted>.

So, 90% / 10%? Yes, perhaps. I guess that's why 10% of the population generally own the vast majority of the wealth. As I said before, dog eat dog.

[mark lamai]

4% is a lot on a big loan of course,

i have found that your local pawn shop charges about the same which i reckon is reasonable,

certainly better than in aus where pawn shops are about 20% per month.

the Nong Khai pawn shop (its a government run business i was told) was full of those engines that run the cultivators in the dry season,

a service to get farmers through the slow times in a way.

then there was the danish guy i met who married a thai girl and went to live in her remote village somewhere,

she set him up as the local loan shark and suddenly he was king of the village.

[paulsmithson]

Sat eating a bowl of noodles last night when I obderved a policeman on the opposite side of the road.He was being constantly approached by locals, money was changing hands and he was making entries in his notebook. the old girl who runs the shop I was sitting outside had come to chat with me and explained that the police ran the money lending operations around here.

Anyone could borrow upto 5,000 baht and the interest rate was 20% per month. i did not even bother to ask what happened to people unable to repay!

[Maigo6]

then there was the danish guy i met who married a thai girl and went to live in her remote village somewhere,

she set him up as the local loan shark and suddenly he was king of the village.

It can also be a very dangerous sideline to be involved in.

[KireB]

What I've seen in Thailand is that people borrow money to buy cars, telephones and other luxury goods! Financially the Thais are completely uneducated.

Financial planning is non-existent and people are not able to oversee the consequences of being debt-ridden.

Mai pen rai. Easy targets for crooked politicians, keep them borrowing and you'll be in charge!

In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

[Pattayaman]

What I've seen in Thailand is that people borrow money to buy cars, telephones and other luxury goods! Financially the Thais are completely uneducated.

Financial planning is non-existent and people are not able to oversee the consequences of being debt-ridden.

Mai pen rai. Easy targets for crooked politicians, keep them borrowing and you'll be in charge!

In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

Exactly what Toxin did

[palm]

What I've seen in Thailand is that people borrow money to buy cars, telephones and other luxury goods! Financially the Thais are completely uneducated.

Financial planning is non-existent and people are not able to oversee the consequences of being debt-ridden.

Mai pen rai. Easy targets for crooked politicians, keep them borrowing and you'll be in charge!

In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

Financially *some* Thais are completely uneducated. <deleted>!

>>In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

source please?

[chownah]

When we got married and had gotten settled in at her village my wife told me one day that she was going to loan her aunt some money to buy fertilizer for her rice field and that she was going to get a really large amount of rice plus the original loan amount back from her in a few months...like this was a good way for her to make money. I asked my wife if she had ever seen people on television shows that were money lenders with their lists of people who owed them and how they went around to collect their debts. She said that she had....so I asked her if these were the best loved members of the community and would she like people to think about her the way that the characters on television think about the people who they owe money to......she got the point.

Chownah

[taxexile]

some brits are just as financially ignorant too.

Britons face 'lifetime of debts'

bbc news.

Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients' debt problems

David Harker, Citizens Advice

It could take 77 years on average for people asking Citizens Advice for help with debt to get back into the black, a report from the charity has said.

This is because most of those asking the charity for help with debt were on just half the national average income.

People were condemned to a "lifetime of poverty" burdened by debt, the charity said, with many unable to afford the fees payable for declaring bankruptcy.

On average, people seeking help from Citizens Advice were £13,153 in debt.

The charity said the number of people seeking counselling for credit card and loan debt had doubled in the past eight years.

The Citizens Advice report stated that many of its clients were stuck in a spiral of low incomes and very high debts.

"Low income, combined with badly informed and poorly understood financial decisions, are at the root of many of our clients' debt problems," David Harker, Citizens Advice chief executive said.

"The reality is that they are condemned to a lifetime of poverty overshadowed by an inescapable burden of unpayable debt," he added.

Mr Harker called on the government to introduce Debt Relief Orders (DROs).

DROs are designed for people on low incomes, who owe less than £15,000 but have very small assets.

DROs would work like bankruptcy, but be low-cost to initiate.

It would offer hope to people who were too poor to take advantage of other debt solutions, the charity said.

and there are violent loan sharks there too.

Tackling inner city loan sharks

By Douglas Marshall

BBC News, West Midlands

People living in central Birmingham are four times more likely than average to be near the bread line, according to the credit scoring agency Experian.

Those living in poorer communities often find it harder to get credit from High Street banks and can fall into the clutches of the loan sharks.

Two violent loan sharks are awaiting sentence for a string of crimes linked to their illegal money lending activities in Birmingham.

Father and son Lee and Christopher Walker bundled one victim into their car and drove him around the area "displaying him as a trophy" to others in their debt.

The man, who owed them money, was then attacked with a machete and a baseball bat.

Jacqui Kennedy, who heads a loan shark team in the city that has helped convict the Walkers, said the pair used tactics common among illegal lenders.

Other loan sharks even demanded sexual favours instead of payments, she said.

"A lot of people who go to loan sharks are desperate. A lot of people go to them because they don't know what a rip-off a loan shark is.

Some people don't know where else to go

"In some cases loan sharks are even perceived as a community service."

Her team was set up, along with another one in Glasgow, in September 2004 and has since helped 1,265 victims of loan sharks find alternative loans.

She said part of her job was to educate those who might think borrowing from a loan shark was a good idea and direct them to credit unions and the Department for Work and Pensions, which provides emergency loans.

"Some of it is lack of understanding, some people don't know where else to go and some people don't know how much debt they are getting into," she said.

Needy times

Credit scoring agencies such as Experian help High Street banks to decide the risks of lending individuals money.

This often means that those living in areas such as central Birmingham, with its high number of people near the bread line, will find it hard to get credit in times of need.

I do think the banks have got a job here as well

Consumer Minister Ian McCartney said the government was planning to widen the loan shark teams to work in cities such as Liverpool, Leeds and Sheffield.

But he said the government wanted High Street banks to help.

"I do think the banks have got a job here as well as us."

He said he believed poor people were just as likely to pay back loans as those who were in higher wage brackets.

"I cannot believe the banks cannot put schemes together working with the local authorities and the credit unions," he said.

Edited May 8, 2007 by taxexile

[xerostar]

What I've seen in Thailand is that people borrow money to buy cars, telephones and other

luxury goods! Financially the Thais are completely uneducated. Financial planning is non-

existent and people are not able to oversee the consequences of being debt-ridden.

Mai pen rai. Easy targets for crooked politicians, keep them borrowing and you'll be in

charge! In the West people borrow too, but the household debt ratio versus mortgage ratio

is much lower than in Thailand.

That's what I thought the problem was too.

I think it's called "the live-now, pay-later syndrome".

It's a mixture of ignorance and a strong "need to have".

Thais have a high regard for social status and think that by being ostentatious with fancy gold chains, phones, cars etc. they can rate themselves higher.

It's a pity the Thai government can't educate people to avoid risky borrowing.

It's certainly a cruel world for the un-educated.

.

.

[JimsKnight]

Don't you feel that answer is just a bit insensitive.... perhaps even pompous? Is "individual responsibility" practiced by more than 10% of the populus here? I daresay, NO! And for those remaining 90%, well, let them eat cake!

Insensitive? I don't know. Frankly, whether it's insensitive or not is irrelevant. It doesnt stop it from being true.

As adults EVERYONE (unless they are handicapped in some way) should be accountable for their own lives, including their successes and failures. I don't see what's wrong with that as a philosophy as life.

No, I don't suppose more than 10% of the Thai populous are that way inclined. Further, I think even fewer in the nanny societies in the west are that way inclined - everything is always someone else's fault. If they get into debt, I hear people whine, it's because the banks made it so easy to borrow. <deleted>? If they get fat, it's because fast food companies make their burgers too tasty. <deleted>.

So, 90% / 10%? Yes, perhaps. I guess that's why 10% of the population generally own the vast majority of the wealth. As I said before, dog eat dog.

I don't always agree with Bendix, but on this one I'm right behind him. Everyone is responsible and should learn to stop diving in getting loans or daft buys. Worse in the west than Thailand, credit card debt transfer, easy loan this and that. Thai village guy I know goes and sells his entire families ancestral land to buy a lousy pick-up, the things worn out now and good for nothing, money down the drain!

You wanna have the cream then you gotta pay the piper!

Can't pay the piper? Then the Piper takes it away!

OT - yipee 600th post!

Edited May 8, 2007 by JimsKnight

[lotus eater]

Yes the rural poor borrow for unnecessary 'luxuries' and often for social (keeping up with the joneses) reasons.

But almost always, also, for essentials, ie to smooth out the seasonality of farming's expense and income, or drought, etc. Moreover many farmers are unable (incompetence or conditions of land/market) to make a profit and therefore sink into debt. A few hard headed ones bite the bullet, stop the farming and go off to a factory job or to live off offspring. Finally most of them lack even the basics of an understanding of finance - the concept of interest, or percentage, etc and think just in terms of absolute sums they have to pay, and whether they expect to have that sum or not. (So the point about their needing to take responsibility doesn't, cannot, apply in a straightforward way in some such cases.)

It's also true that they seem to be oblivious of friends and supposedly reputable figures like the village school master growing rich as a loan shark - on the contrary he continues as a respected friend etc. (I've seen an instance of this.)

It's depressing that the government doesn't move on this.

[fxm88]

See also payday loan and sub-prime lending.

[mosquitoman]

Can any one tell me who the most debt ridden nation on this planet is?

MM

[Phil Conners]

The problem here is that most of the Thais taking those 4%/month loan have no idea how much real money this is on a yearly basis. Lack of education again.

[Maigo6]

The problem here is that most of the Thais taking those 4%/month loan have no idea how much real money this is on a yearly basis. Lack of education again.

Where as people in the UK maxed up to the eyeballs with credit card debt, mortgages and car loans are really smart.

[Maigo6]

Can any one tell me who the most debt ridden nation on this planet is?

MM

http://www.creditaction.org.uk/debtstats.htm

Average household debt in the UK is £8,833 (excluding mortgages) and £54,452 including mortgages.

Average owed by every UK adult is £28,024 (including mortgages). This grew by £168 last month.

Average outstanding mortgage for the 11.6m households who currently have mortgages is £95,170

Average interest paid by each household on their total debt is approximately £3,525 each year.

Average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,550 per average UK adult at the end of March 2007.

Britain's personal debt is increasing by £1 million every 4 minutes.

Must be lack of education ..................

Edited May 8, 2007 by Maigo6

[Phil Conners]

The problem here is that most of the Thais taking those 4%/month loan have no idea how much real money this is on a yearly basis. Lack of education again.

Where as people in the UK maxed up to the eyeballs with credit card debt, mortgages and car loans are really smart.

I didn't say that, but anyway, they surely don't pay 50% PA interests.

[Maigo6]

The problem here is that most of the Thais taking those 4%/month loan have no idea how much real money this is on a yearly basis. Lack of education again.

Where as people in the UK maxed up to the eyeballs with credit card debt, mortgages and car loans are really smart.

I didn't say that, but anyway, they surely don't pay 50% PA interests.

Ok Phil, by the way........... You must have the best avatar on this forum, great pic.

[KireB]

What I've seen in Thailand is that people borrow money to buy cars, telephones and other luxury goods! Financially the Thais are completely uneducated.

Financial planning is non-existent and people are not able to oversee the consequences of being debt-ridden.

Mai pen rai. Easy targets for crooked politicians, keep them borrowing and you'll be in charge!

In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

Financially *some* Thais are completely uneducated. <deleted>!

>>In the West people borrow too, but the household debt ratio versus mortgage ratio is much lower than in Thailand.

source please?

Never wondered why there are so many cars in Thailand (31% according to Nation M. Media), or why so many people have more expensive phones than I have? The Thais have an average (average!!) earning of 21.000 baht a month, while 60% earns around 6/7 k a month.So financially something is not right.

Use google to find your sources, because there are too many to mention.

Type Thai Household debt and you'll have a lot to read! Household debt is debt without contra value by the way!

This loosing money!

Regards