20% Interest Per Month!

[Joburg]

A good Thai friend of mine spend weeks in hospital and was then faced with bills (hospital and others) of more than BT100,000. She got a loan from a loanshark at an interest rate of 20% per month. The amount owed has since doubled. Currently her whole salary and their income from rubber goes into paying interest. She works 7 days a week but does not even have money for rent at the end of the month. Furthermore, she is harrassed at work and threatened with court action and jail if she does not pay up. I have read that they actually lock people up in Thailand for failing to pay debt!

Question, where can she find a lawyer to advice her on her rights and where can se get a better deal on rates for a loan?

[Gary A]

I think the maximum rate allowed by law is one and a half percent per month. Unfortunately that apparently is rarely enforced and the loan sharks pretty much do as they like. I don't think the law or police will be her problem.

[Riley'sLife]

Most of the villages around where I live (Southern Thailand) have village organisations for savers and borrowers. To be able to borrow, one would first need to be a member. To become a member, one has to commit to regular monthly savings. Savers get monthly interest, borrowers pay monthly interest – 1% per month.

Legal redress in Thailand is virtually non-existent, as are your friend’s “rights”. A lawyer will be of little or no use.

She would be well advised to pay off the loan asap!

Even now, in my village, people will murder the lender rather than repay a loan, which is why fewer people are now willing to enter into private loan arrangements.

I sympathise with your friend's plight which shows Thailand for what it really is.......

[dave111223]

I'm sure i've read this story a few times before; but normally involves a sick buffalo?

Next "your friend" will be saying they don't want you get lawyer as the "loan shark" could get nasty. But certainly wouldn't have a problem with you "helping to pay off the loan".

Maybe i've just been reading too many TV stories.

[Boater]

that is in fact the typical rate here in Samui.. i know alot of people that borrow from them and cannot keep up repayment

[think_too_mut]

I'm sure i've read this story a few times before; but normally involves a sick buffalo?

Next "your friend" will be saying they don't want you get lawyer as the "loan shark" could get nasty. But certainly wouldn't have a problem with you "helping to pay off the loan".

Maybe i've just been reading too many TV stories.

Any Thai could tell you the same story about how loan sharks operate.

I am just wondering if the "friend" has better or longer standing friends than the OP might be?

Why does it take a farang to tell him about her (quite plausible) story?

IMO, the OP is invited to pay off the loan. There is no other way out for the "friend", whatever the money was for.

P.S.

My wife, next to me, just remarked - no way a government hospital would charge 100K baht for anything other than an ailment that won't make her be back on her feet after a few weeks, let alone continue hard work (12 hours a day, as said).

Poorer care it might be but not such a high charge.

[joskydive]

A good Thai friend of mine spend weeks in hospital and was then faced with bills (hospital and others) of more than BT100,000. She got a loan from a loanshark at an interest rate of 20% per month. The amount owed has since doubled. Currently her whole salary and their income from rubber goes into paying interest. She works 7 days a week but does not even have money for rent at the end of the month. Furthermore, she is harrassed at work and threatened with court action and jail if she does not pay up. I have read that they actually lock people up in Thailand for failing to pay debt!

Question, where can she find a lawyer to advice her on her rights and where can se get a better deal on rates for a loan?

1. I'm surprised that the loanshark actually gave her the money without some sort of guarantee i.e. Chanote, gold etc.,

2. She can only be taken to court and jailed if she actually made a written contract with the loanshark.

3. The maximum interest in law is 15% per year.

Frankly, if she did make this sort of deal with a loanshark, I agree with other posters who have already stated that she has more worries than what a court, jail or lawyers can do. She would be advised to pay this debt off a.s.a.p for her own safety.

As for the Law! I have checked in the Civil and Commercial Code. Chapter 11.

Loan for Consumption.

Section 653

A loan of money for a sum exceeding 50 baht in capital isnot enforceable by action unless there be some written evidence of the loan signed by the borrower.

No repayment of a loan of money evidenced by writing may be proved unless there be some written evidence signed by the lender, or the document evidencing the loan has be surrendered to the borrower or cancelled.

Section 654

Interest shall not exceed 15% per year; when a higher rate of interest is fixed by the contract, it shall be reduced to 15%per year.

Section 655

Interest shall not bear interest. The parties to a loan of money may, however, agree that the interest due for not less than one year shall be added to the capital, and that the whole shall bear interest, but such agreement must be made in writing.

Section 656

If the loan is made for a sum of money, and the borrower accepts goods or other property instead of such sum, the amount of the debt due shall be considered as equal to the market value of the goods or property at the time and place of delivery.

If a loan is made for a sum of money, and the lender accepts goods or other property for the repayment of the loan, the amount of the debt extinguished thereby shall be considered as equal to the market value of the goods or property at the time and place of delivery.

Any agreement to the contrary is void.

[samgrowth]

Why get a loan to pay the hospital? Your friends could just pay 30 Baht to the hospital. End of story.

[Heng]

People do silly things all the time. I suppose no one here is making mortgage or car payments, or leasing a place at a high% of one's monthly income, instead of buying/renting something more affordable?

In the process (not yet, but I can see these things coming a mile away) of having to evict, or more likely they'll just take off in the middle of the night, some tenants who are treading water making car payments despite not even owning a home and are always late on their rent to us.

[Joburg]

A good Thai friend of mine spend weeks in hospital and was then faced with bills (hospital and others) of more than BT100,000. She got a loan from a loanshark at an interest rate of 20% per month. The amount owed has since doubled. Currently her whole salary and their income from rubber goes into paying interest. She works 7 days a week but does not even have money for rent at the end of the month. Furthermore, she is harrassed at work and threatened with court action and jail if she does not pay up. I have read that they actually lock people up in Thailand for failing to pay debt!

Question, where can she find a lawyer to advice her on her rights and where can se get a better deal on rates for a loan?

1. I'm surprised that the loanshark actually gave her the money without some sort of guarantee i.e. Chanote, gold etc.,

2. She can only be taken to court and jailed if she actually made a written contract with the loanshark.

3. The maximum interest in law is 15% per year.

Frankly, if she did make this sort of deal with a loanshark, I agree with other posters who have already stated that she has more worries than what a court, jail or lawyers can do. She would be advised to pay this debt off a.s.a.p for her own safety.

As for the Law! I have checked in the Civil and Commercial Code. Chapter 11.

Loan for Consumption.

Thanx for the info. She has got a written contract with these people - there are more than one of them. And she was summoned to court on dec 24, but she managed to get more loans at this crazy rate to pay for that one to stay out of jail and court.

She has assests - land with rubber in the South, but with the falling oil price she cannot sell it. I dont know if she used this land as collateral for the loans, but I doubt.

The loansharks wont negotiate a better interest rate as she is from the South and they belief she is rich. They just keep on pushing her and I can see that she will land up in hospital again as she has an ulcer already and a hart problem (thats where the debt comes from).

Is there anyway she can try to convince these people that she cannot come up with the 20% a month any longer.

[mmushr00m]

Why dont she borrow money from the banks?

She has land to use as colateral. The banks interest charges will definitely be less then 20% per month.

Borrow from the banks to pay the loan sharks.

[hhgz]

"I'm surprised that the loanshark actually gave her the money without some sort of guarantee i.e. Chanote, gold etc..."

She does have a "guarantee": a farang boyfriend.

[Heng]

Why dont she borrow money from the banks?

She has land to use as colateral. The banks interest charges will definitely be less then 20% per month.

Borrow from the banks to pay the loan sharks.

People go to loansharks because the banks won't lend them the funds. In fact, it often works like this...

1. Go to the bank at MLR. They say, "sorry, you don't have enough income to get a loan from us." Or... "sorry, we only use property with homes, buildings, or other structures (developed) property as collateral." Or... "your credit rating printout is reminiscent of Swiss cheese."

2. Go to the pawnshops at 1.25%.

3. Go to well to do relative or acquaintence @ 1%.

4. Go to the local old school money guy/loan shark-ish type character @ 3%.

5. Go to the newish player getting into the game doing his biz @ 5%.

6. Go to the ex or current local army or police figure or gangster at 10-20% who make daily collections at a specified time, and if you don't pay, the separate collection team shows up the same day...

Often, folks with a deathwish or no cares for the future will try to get loans from all of the above if possible.

[billaaa777]

Absolutely shocking that a loan shark would charge a high interest rate.

Where else in the world could that happen?

And of course the reason your friend needed it was because they were in the hospital. Even though a hospital does not threaten your life if you don't pay, they still felt the good faith in there heart to pay them right away by taking out a loan from a dishonorable person.

I was just wondering, how is their buffalo doing? Has it been sick lately and does it need to see the vet soon?

[marshbags]

Why dont she borrow money from the banks?

She has land to use as colateral. The banks interest charges will definitely be less then 20% per month.

Borrow from the banks to pay the loan sharks.

People go to loansharks because the banks won't lend them the funds. In fact, it often works like this...

1. Go to the bank at MLR. They say, "sorry, you don't have enough income to get a loan from us." Or... "sorry, we only use property with homes, buildings, or other structures (developed) property as collateral." Or... "your credit rating printout is reminiscent of Swiss cheese."

2. Go to the pawnshops at 1.25%.

3. Go to well to do relative or acquaintence @ 1%.

4. Go to the local old school money guy/loan shark-ish type character @ 3%.

5. Go to the newish player getting into the game doing his biz @ 5%.

6. Go to the ex or current local army or police figure or gangster at 10-20% who make daily collections at a specified time, and if you don't pay, the separate collection team shows up the same day...

Often, folks with a deathwish or no cares for the future will try to get loans from all of the above if possible.

In my Moo Ban they used to come to marshbags @ zero% but all reneged on their promises.

While i managed to get most of it back over longgggg periods and my wife pestering them for it, it put me off lending, full stop.

Our family have been paid back big time with going from Jai Dee to Jai dam_n around the village.

Spiteful doesn,t even come into the way we were treated and what they did and still do.

Talk about kicking the gift horse in the mouth.

Lend money and loose your phoney status and so called friends.

So for anyone doing similar favours........be careful.

I,m not bitter about what happened, but it sure upset me at the time and still does when i,m called kineow ??? ect to total strangers who tend to believe the word of mouth,

Especially for my wife, who is being isolated, apart from a small group of genuine locals.

Will we move, not yet as we now know who is who in the community and can managed without them along with no more hard luck stories.

I,m posting this soley to let others know, who may fall for the crocodile tears and hard luck stories.

marshbags

P.S.

While i can / have survive /d the losses comfortably, they have lost their face and all that goes with it, including the interst free loans.

P.P.S.

I wouldn,t recommend anyone refusing to pay the loan sharks back as retribution is swift and sometimes deadly.

Edited January 18, 2009 by marshbags

[Gary A]

This thing has a distinct odor. I'm sure that anyone would much rather owe a hospital than a loan shark. She has to have been smarter than to borrow money that she KNEW she could not pay back. Looks like a shake down to me. The farang white knight will ride to the rescue. Loan sharks do NOT loan money to people unless they are sure that person can pay it back one way or another.

[YagerTool]

20% a month? Im going to become a loan shark. THat is outrageous

[wolfmanjack]

The loan sharks that we know only do 20% if there is no collateral. if you have collateral it is "only" 7%.

i have to agree with those that think something sounds not right about this deal. It is better to owe the hospital than the bank and she would not have been called to court since any written contract stating 20% a month would be void anyway.

[ballbreaker]

My GF was able to owe money to a government animal hospital in Bangkok for intensive care for her dog so one would think the same is possible with government hospital for people.

My GF also described some sort of lending group she has borrowed money from in the past. Its a group of people (co-op) that lends money to person willing to pay highest interest. Its sounds like an auction process from the way she described everything but I am not sure of all the details. I also get the impression you have to be member of co-op to borrow but that may not be the case. In her case she won the bid for a flat 25 percent. She borrowed 44k baht so twenty two members each contributed 2k baht each to total 44k. She then was required to pay 5k a month for 11 months which totaled 55k at the end.

[donx]

Why are so many of you assuming the OP is referring to a government hospital? It could well be a private hospital that his friend owed money.

Nevertheless, I agree that even if it was a private hospital, I would much prefer to owe them than a loan shark.

My guess is that the friend needed money for some other less acceptable reason such as to settle a gambling debt, perhaps of one of her family members.

[hhgz]

"Absolutely shocking that a loan shark would charge a high interest rate."

Well, that's why the person is call a "loan shark", as compared to a "bank"

"Where else in the world could that happen?"

Off the top of my head, I'd say "the US".

[Joburg]

Why are so many of you assuming the OP is referring to a government hospital? It could well be a private hospital that his friend owed money.

Nevertheless, I agree that even if it was a private hospital, I would much prefer to owe them than a loan shark.

My guess is that the friend needed money for some other less acceptable reason such as to settle a gambling debt, perhaps of one of her family members.

Thanx Donx - yes, I said hospital and other bills. Here father was seven weeks in Srinakarin and other hospitals before he passed away. A week after that she went onto a coma and was admitted to the Nakarin hospital in Nakorn Si Thammarat where she had a heart procedure. After that she was in Lardsin hosp in BKK and one in Krabi for stomach ulcer, etc. And if you dont pay these private hospital they kick you out!

The good news is that she has got a b170,000 from the bank using her car. She has a b30,000 to pay urgently and for the b50,000 she can pay interest until she can find and alternative.

She had to leave her job in bkk and went back to krabi cause they threatened her at work. But she is a smart girl with 2 degrees so she should find a jod (as marketing mngr) fairly easy.

She never approached me for money - Im just want to know how it works in Thailand and how she can get out of this.

So, yes there is B80,000 at 20% remaining - I guess we have to act pretty fast!

[dave111223]

Wait let me get this straight?

- Father went into hospital and die

- She went into a comma

- She had a heart operation

- She was hospitalized for a stomach ulcer, "etc"

- Had to leave good job in BKK (and went to Krabi??)

- Has 2 degrees

Dude....just don't tell us you met her in a bar?

Edited January 23, 2009 by dave111223

[finner]

Just talked to my gf about this because it seemed so far fetched. As far as we know, no Thai pays for dying or having a serious illness in a government hospital as long as you are registered with the government. The only time they pay is for a self inflicted injury such as alcohol related illnesses or traffic accidents where the "at fault" party pays. If you die, the only expense is the truck to take you home. Maybe I've lived in the country too long though.............

[finner]

A small error I made in the above post. The free hospitalization is from your LOCAL hospital who can send you to a better hospital also free as long as you are registered with a But Prakan Sukapap Tuan Na card which apparently every Thai can get free.

[mmushr00m]

"The good news is that she has got a b170,000 from the bank using her car. She has a b30,000 to pay urgently and for the b50,000 she can pay interest until she can find and alternative."

Like I posted earlier, why didnt she go to the bank?????????

If she had she would still have money left over instead of still owing more money.

And having to quit her job, why? no work, how is she going to pay now???? owing money to the loan shark and the bank.

I am not saying that she is pulling a scam but her decision making process is questionable.

2 degrees, but like a saying goes, "book smart doesnt necessary mean life smart".

[torrenova]

If you end up owing a private hospital all they can do is take you to court. However, they may refuse treatment but as stated above, someone with assets ca get advances very easily, especially on things like cars.

[LivinLOS]

The loan sharks that we know only do 20% if there is no collateral. if you have collateral it is "only" 7%.

I too am not sure why people are so shocked at this.. I heard a long while back from a few sources that unsecured loan sharking was done on the chinese system of 5 for 4 on small amounts.. The bar girls I used to know had silly little debts of a few 1000 here and there and were then just covering the interest monthly (no one said they were there cos they were smart)..

If theres collateral it drops off markedly.. Gold shops are 1.5 % ?? And even a loan shark will drop to single digits with a land title or a car book.

Edited January 25, 2009 by LivinLOS

[Joburg]

The loan sharks that we know only do 20% if there is no collateral. if you have collateral it is "only" 7%.

If theres collateral it drops off markedly.. Gold shops are 1.5 % ?? And even a loan shark will drop to single digits with a land title or a car book.

Thanx LivinLOS.

Just one question - what is, or how does a land title in Thailand look like? I know that the land they have used to be her grandfathers who passed away in Feb 08. What I say is grandfather passed away in Feb 08, father passed away 30 August 08 - In whos name will the land be. And where will the land title(s) be? I know things take time in LOS.

Is there any other alternative to look at? Landwise that is, cause she used her car already.

[dave111223]

Thanx LivinLOS.

Just one question - what is, or how does a land title in Thailand look like? I know that the land they have used to be her grandfathers who passed away in Feb 08. What I say is grandfather passed away in Feb 08, father passed away 30 August 08 - In whos name will the land be. And where will the land title(s) be? I know things take time in LOS.

Is there any other alternative to look at? Landwise that is, cause she used her car already.

This story gets better and better; now the grandfather's dead! Both father and grandfather dead in the same year...

It's starting to sound like a story some of my Nigerian "Friends" always seem to email to me, it's got all the key parts; money, interest, loans, death, illness, banks, assets without a clear owner...