Any Stories About High Interest Loans?

[intumult]

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.

I am also with Bendix on this.

Seen many Thai people borrow money at much higher rates than 4% a month. Their parents do (and did) the same and it looks to be part and parcel of life in Thailand.

Many of these loans, as I understand it, are short trem loans that the banks will not help with so the Thais have to go somewhere for the money. Add to that those that have already defaulted on previous debts it is no wonder they go to loan sharks.

[onnut]

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.

I bet he is still around

[TangledWeb]

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[TheDon]

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?

Well i dont think the gap between west and the Thais are much difference, but it depends on what country you pick out of the west vs the Thai's.

People in Australia pay those ridiculas rates too, and most people I know are in debt with a house, credit card etc.

[intumult]

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!).

I presume, then, that you have never seen the local BiB collecting money and handing it out?

Money lending at high rates is done by all manner of Thais.

Go to some of the local markets where the stall holders need money to buy fresh produce each day. Where do many of them get the money? Moneylenders and at HUGE interest rates for the day. These moneylenders have a couple of big guys who stay at the market all day to ensure the loans are repaid.

Someone needs to buy a motorbike, pay for a school holiday, uniform, etc. etc. they borrow money to pay for it and yes it is a fact of life they have to pay high interest.

While people in office are corrupt, ou think they will really ever bother about people paying 5% or whatever a month???

[TangledWeb]

While people in office are corrupt, you think they will really ever bother about people paying 5% or whatever a month???

First things first, quit having such a defeatest attitude. Sometimes I wonder if attitudes like yours reveal you to be someone who works for the government specifically to throw around such negative talk. I don't mean to pick on you, but really, why take such a lost position and why infect others with it?

The west is rapidly developing the same issues that you speak of. Check out badcreditcards.org

click on any of the credit card companies and see for yourself how others around

the world are being mistreated by credit card companies, this is a world wide problem.

Making people overwork for their money is creating a strain on the planets resources.

Paper violence is the worst kind of all, and that is what credit card debt paid back

with unreasonably high interest rates is, Paper violence. They put a number on paper

and then if you don't pay you are physically punished no matter how unreasonable

the terms of the debt are. This is wrong.

[soundman]

Making people overwork for their money is creating a strain on the planets resources.

Paper violence is the worst kind of all, and that is what credit card debt paid back

with unreasonably high interest rates is, Paper violence. They put a number on paper

and then if you don't pay you are physically punished no matter how unreasonable

the terms of the debt are. This is wrong.

Not really.

You didn't have to sign the contract for the exhorbidant interest rates in the first place. Why make the credit provider look like the evil monster lurking. If it was me I would be looking at myself first & why I had to have the new TV, mobile phone, computer, other electronic gadgets etc.

I see people fall into credit traps all the time & 95% of them have no-one but themselves to blame.

Soundman.

[Heng]

Well, many folks don't want to accept personal accountability. It's easier to blame the credit card companies, banks, finance companies, Thaksin, Soros, etc. etc.

[TonyLeung]

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 highly doubt you can legally lend money at these rates. Therefore, there is no contract, as contract is a legal term. Instead, its basically extortion, only the person being extorted agrees willingly to it.

Edited November 26, 2007 by TonyLeung

[TonyLeung]

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.

im all for personal responsibility but this is silly. you don't see any reason why it should be illegal to lend people money at 50% annual interest rates and then break their legs if they dont pay you?

debtor's prisons were abolished a long time ago.

[TangledWeb]

Making people overwork for their money is creating a strain on the planets resources.

Paper violence is the worst kind of all, and that is what credit card debt paid back

with unreasonably high interest rates is, Paper violence. They put a number on paper

and then if you don't pay you are physically punished no matter how unreasonable

the terms of the debt are. This is wrong.

Not really.

You didn't have to sign the contract for the exhorbidant interest rates in the first place. Why make the credit provider look like the evil monster lurking. If it was me I would be looking at myself first & why I had to have the new TV, mobile phone, computer, other electronic gadgets etc.

I see people fall into credit traps all the time & 95% of them have no-one but themselves to blame.

Soundman.

I agree that using credit to show off or buy unnecessary items will not elicit sympathy. However those that already have money "generously" offer ridiculous terms to those with legitimate needs, than say it was free will. But my point still stands, overpaying,

paying, and paying, and paying for an item even after it becomes obsolete is a form a "civilized" slavery.

If someone borrows one hundred dollars, how much should they legitimately have to pay back in interest on that one hundred dollars? If you think it is legitimate that one should eventually pay back 500 dollars on a one hundred dollar loan, I would disagree, especially if the item that was bought devalues over time. (meaning it is not real estate).

Lets not judge, lets keep it about numbers. Because a person does pay back way too much on a simple loan, this indeed overheats the planets economy and causes unnecessary overuse and pollution of the worlds resources. The person paying back the loan overconsumes

resources just by doing their job.

"I'm paying off a toaster", because of the high interest rate, the person ends up working 10 extra hours to pay the interest. It would be better if the worker just kicked back and did not work so many extra hours paying off exhorbitant interest charges.

Not everybody comes into life on equal financial footing. Those who already have wealth can use paper violence over those just trying to survive. Lets not lose focus on how simple it can become to abuse others simply by the use of numbers.

Edited November 26, 2007 by TangledWeb

[TonyLeung]

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.

You sound like a 16 year old kid who just got done reading Nietzsche. When the farmer doesn't make April's payment, do you think the loan shark goes to the local courthouse? No, because it is illegal to lend money at those interest rates. So what does he do? I guess he either takes his daughter and sells her to a brothel or he starts breaking parts of his body?

Edited November 26, 2007 by TonyLeung

[pnustedt]

You sound like a 16 year old kid who just got done reading Nietzsche. When the farmer doesn't make April's payment, do you think the loan shark goes to the local courthouse? No, because it is illegal to lend money at those interest rates. So what does he do? I guess he either takes his daughter and sells her to a brothel or he starts breaking parts of his body?

The loan shark does (or can) go to the local courthouse if the farmer does not make the payment. The loan is normally taken out using property as security. The court will then apply their interest rate to the outstanding loan and sell the farmers' property to pay back the loan to the lender. It is not illegal to lend money at those interest rates.

[bendix]

im all for personal responsibility but this is silly. you don't see any reason why it should be illegal to lend people money at 50% annual interest rates and then break their legs if they dont pay you?

debtor's prisons were abolished a long time ago.

Tony, with respect you're garnishing (and spoiling) an intellectual argument with emotional sauce.

Let's take your two questions in isolation:

1) Do I see any reason why it should be illegal to lend people money at 50% annual rates? No, none at all. Jeez, publicly listed major credit card companies do it at 30% and noone whines.

2) Should they break your legs if they don't pay you? Of course not.

The argument is trite. You are confusing the right to borrow and lend as free individuals with the encroachment of gangster tactics to recoup.

Edited November 27, 2007 by bendix

[bendix]

You sound like a 16 year old kid who just got done reading Nietzsche. When the farmer doesn't make April's payment, do you think the loan shark goes to the local courthouse? No, because it is illegal to lend money at those interest rates. So what does he do? I guess he either takes his daughter and sells her to a brothel or he starts breaking parts of his body?

And now you're just making up facts to shore up a tenuous position. Please direct us to the legislation where it says it is illegal for private individuals to borrow and loan money at whatever mutually agreed interest rate they so choose.

[soundman]

debtor's prisons were abolished a long time ago.

Not true.

Still exists in Thailand at a standing rate of 200B per day in prison.

Exactly what debts & how it is enforced are not exactly clear to me however, with a little research on the subject I am sure one can find out.

Soundman.

[TangledWeb]

It's about the math.

If one was fortunate enough to be given a rate of 4.9% a year until the balance is paid off, and they only pay the monthly minimum, they are actually paying over 20% interest. How does 4.9% interest actually equal over 20%? Compare the amount of the monthly payment that is applied towards interest only versus the amount of that payment that is applied to the principal and then divide interest by principal. Example #1, you pay 100 towards principle, 30 dollars towards interest, divide 30 by 125 = 24%

Example #2. If every month you make a 200 dollar payment and 100 dollars goes to pay down the principle and 100 dollars goes towards interest, you are paying 100% interest.

For those who follow the bible it says that usury (charging interest) is prohibited. How about a compromise somewhere between zero interest and outrageous interest rates? I offer a solution on page three of my website. ShareAmillion.com Credit Card Interest Rate Cap Solution

Edited November 27, 2007 by TangledWeb

[TonyLeung]

if there are no laws regulating interest rates on loans than i am clearly wrong and apologize. i have spoken with Heng before about his pawnshop business and i think he said that they are legally allowed to charge 1% interest/month.

if someone accepts a loan with a 50% interest rate, i think the default rate must be very high. what is the normal process when one cannot repay the loan?

Thailand has debtor's prisons? more details on that please.

[TangledWeb]

if there are no laws regulating interest rates on loans than i am clearly wrong and apologize. i have spoken with Heng before about his pawnshop business and i think he said that they are legally allowed to charge 1% interest/month.

if someone accepts a loan with a 50% interest rate, i think the default rate must be very high. what is the normal process when one cannot repay the loan?

Thailand has debtor's prisons? more details on that please.

I think all credit card interest should be "capped" at 50%. That means once 50% of the total borrowed has been paid in interest, the remaining debt is paid off interest free.