Olafur Posted October 25, 2015 Share Posted October 25, 2015 I just learned that my Thai wife’s family ran into problem with a very expensive microfinance “Village Fund” loan. They borrowed 100 000 bath 18 months ago and tell they have to pay 36% interest, which means their debt grows fast. I found that 15% is the maximum annual interest rate allowed under the "Civil and Commercial Code”. I just wonder if this is allowed, or some grafts going on? Anybody know more about this? Link to comment Share on other sites More sharing options...
MaeJoMTB Posted October 25, 2015 Share Posted October 25, 2015 (edited) False claims of financial difficulties in order to extract money from a gullible foreigner, should always be considered. Edited October 25, 2015 by MaeJoMTB Link to comment Share on other sites More sharing options...
stoneyboy Posted October 25, 2015 Share Posted October 25, 2015 When two guys show up on a Honda CBR 150 motorbike be sure to ask them under what circumstances is this proposed loan. Link to comment Share on other sites More sharing options...
spidermike007 Posted October 25, 2015 Share Posted October 25, 2015 I just learned that my Thai wife’s family ran into problem with a very expensive microfinance “Village Fund” loan. They borrowed 100 000 bath 18 months ago and tell they have to pay 36% interest, which means their debt grows fast. I found that 15% is the maximum annual interest rate allowed under the "Civil and Commercial Code”. I just wonder if this is allowed, or some grafts going on? Anybody know more about this? Allowed? Are you referring to the concept of law and order? Link to comment Share on other sites More sharing options...
Nuddy Posted October 25, 2015 Share Posted October 25, 2015 A hundred thousand Baht is not much for a foreigner I reckon. About A$4000 or 1800 UK pounds. Sure I would not want to pay it out. But be a hero and sort it it for them. However, what you will never ever know is that "is this the only one loan they have?" I doubt its legal but there will be no legal ramifications to non payment, only hurt, injury sand possibly death. Get off your high horse, pay it for them or get out of there soon.As mentioned it could be a scam to get you to start paying. Regards Link to comment Share on other sites More sharing options...
cornishcarlos Posted October 25, 2015 Share Posted October 25, 2015 When two guys show up on a Honda CBR 150 motorbike be sure to ask them under what circumstances is this proposed loan. What have foreign English teachers have to do with this? They need the extra cash to supplement their low income... Link to comment Share on other sites More sharing options...
Robert24 Posted October 25, 2015 Share Posted October 25, 2015 36% p.a. or 3% per month is a normal rate if you have land/chanote as collateral/security. Without collateral/security you pay up to 10% interest per month. Link to comment Share on other sites More sharing options...
Robert24 Posted October 25, 2015 Share Posted October 25, 2015 Additionally usually loans with chanote as collateral are registered at the land office, I.e. If you not repay the amount it is very easy for the land to be repossessed. Also bear in mind that in all docs, land office and loan agreement it will be stated that the interest is 15%. Even though reality is 36%. And the repayable amount on the loan agreement and land office agreement includes the interest, i.e. In your example of 36%, 100k, 18 months, the loan agreement would say the amount is 154k. Hope this helps. Link to comment Share on other sites More sharing options...
NickJ Posted October 25, 2015 Share Posted October 25, 2015 Sure be a hero and save the day. Pay it off for them and then take a deep breath.......as before you exhale you will be asked to help with more problems than you ever knew could have existed...... Link to comment Share on other sites More sharing options...
Martyjustice Posted October 25, 2015 Share Posted October 25, 2015 Run away period ! Link to comment Share on other sites More sharing options...
Briggsy Posted October 25, 2015 Share Posted October 25, 2015 Do you have your pearly white steed and shining knight's armour at the ready? A damsel and her downtrodden peasant family are in distress at the mercy of the evil baron. Link to comment Share on other sites More sharing options...
Robert24 Posted October 25, 2015 Share Posted October 25, 2015 False claims of financial difficulties in order to extract money from a gullible foreigner, should always be considered.this may well be all about extracting money, I agree. But you'd be surprised how many Thais have accumulated debt, especially debt that is expensive to service like this one. Link to comment Share on other sites More sharing options...
DILLIGAD Posted October 25, 2015 Share Posted October 25, 2015 Sure be a hero and save the day. Pay it off for them and then take a deep breath.......as before you exhale you will be asked to help with more problems than you ever knew could have existed......Also, time to carefully check the Land papers IF you have built a house and lock away any registration books if you have vehicles in your name. Link to comment Share on other sites More sharing options...
DILLIGAD Posted October 26, 2015 Share Posted October 26, 2015 False claims of financial difficulties in order to extract money from a gullible foreigner, should always be considered.this may well be all about extracting money, I agree. But you'd be surprised how many Thais have accumulated debt, especially debt that is expensive to service like this one.That is why there are so many Chinese renting out houses that have been repossessed. Link to comment Share on other sites More sharing options...
Jip99 Posted October 26, 2015 Share Posted October 26, 2015 Sure be a hero and save the day. Pay it off for them and then take a deep breath.......as before you exhale you will be asked to help with more problems than you ever knew could have existed......Also, time to carefully check the Land papers IF you have built a house and lock away any registration books if you have vehicles in your name. Even that may not be enough. The lenders that you are aware of will happily lend unsecured (to a limited degree, and often to get a hook) if they know there is land around. I recently saw a 50,000 Baht unsecured debt that had risen to almost 100k with unpaid interest - and then converted to a secured loan of 400,000 Baht. The debt was over 600k when the Farang became aware it whilst trying to sell the house. The buyer's knowledge of the debt forced the price down and the only good thing to come out of the transaction was the Land Office enforcing the legal maximum interest rate (I thought was 15% but they applied 18%) rather than the contract rate of 5% per month. There are a whole host of agents going round looking for gullible borrowers. Link to comment Share on other sites More sharing options...
technologybytes Posted October 26, 2015 Share Posted October 26, 2015 Just do not get involved, it has nothing to do with you and interference will only make matters worse. Link to comment Share on other sites More sharing options...
catman20 Posted October 26, 2015 Share Posted October 26, 2015 When two guys show up on a Honda CBR 150 motorbike be sure to ask them under what circumstances is this proposed loan. Link to comment Share on other sites More sharing options...
F4UCorsair Posted October 26, 2015 Share Posted October 26, 2015 (edited) Don't touch it. Does 'the thin edge of the wedge' mean anything to you? Edited October 26, 2015 by F4UCorsair Link to comment Share on other sites More sharing options...
Maestro Posted October 26, 2015 Share Posted October 26, 2015 Removed an off-topic post. Link to comment Share on other sites More sharing options...
ehs818 Posted October 26, 2015 Share Posted October 26, 2015 How long have you been married? Seems like this is how long it took for you to discover that your wife married an ATM. Link to comment Share on other sites More sharing options...
prakhonchai nick Posted October 26, 2015 Share Posted October 26, 2015 The OP referred to a village fund loan These loans are usually limited to a maximum of 50,000baht to the best people. with 10,000baht to most others but carry a normal annual interest rate of 6%. This is clearly not a village fund loan When it comes time to pay, the lenders bluff needs to be called, whether the loan was secured or not. Mention legal action if they do not adhere to the maximum permitted 15%pa interest rate. It worked recently near me, when a 1 million baht+ loan over nearly 3 years at 5% interest per month was called in. With compound interest the lenders still had a nice little windfall. Link to comment Share on other sites More sharing options...
tomwct Posted October 26, 2015 Share Posted October 26, 2015 My wife works for a District office that oversees these village funds. Normally they will charge 1% per month, if the loan is repaid in a proper manner, but 36% is "Bull"! I suggest you talk with your wife and get the truth from her or take her to your local District Office and talk with the person who oversees those loans in your village!! This could be just a shakedown of the Falang! Link to comment Share on other sites More sharing options...
jomcondo Posted October 26, 2015 Share Posted October 26, 2015 A hundred thousand Baht is not much for a foreigner I reckon. About A$4000 or 1800 UK pounds. Sure I would not want to pay it out. But be a hero and sort it it for them. However, what you will never ever know is that "is this the only one loan they have?" I doubt its legal but there will be no legal ramifications to non payment, only hurt, injury sand possibly death. Get off your high horse, pay it for them or get out of there soon.As mentioned it could be a scam to get you to start paying. Regards so whats your final answer Noddy?.......... Link to comment Share on other sites More sharing options...
Kangaroo29 Posted October 26, 2015 Share Posted October 26, 2015 Game over red rover, the misses is the middleman for the salvitating family who are testing the water for future opportuities. Link to comment Share on other sites More sharing options...
johnno2 Posted October 26, 2015 Share Posted October 26, 2015 this is a very expensive "sick buffalo". are you sure you want these types of stories appearing for the rest of your married life? think and take the appropriate action (run for the hills while you still have some money left) Link to comment Share on other sites More sharing options...
kovaltech Posted October 26, 2015 Share Posted October 26, 2015 OP a "village fund" loan is never at 36%.... most i have seen is 3% for the legit ones. (for rubber three plantation, or fertilizer loans funded by local government) somebody is lying for sure... question is who Link to comment Share on other sites More sharing options...
Jip99 Posted October 26, 2015 Share Posted October 26, 2015 Benefit of the doubt here chaps! It is very easy for a Thai and Farang to have a communication misunderstanding over 'Village loan fund' and 'loan in the village'. Be fair....... it could all be genuine. Link to comment Share on other sites More sharing options...
williet98248 Posted October 26, 2015 Share Posted October 26, 2015 Don't trust what anybody in the family tells you. Verify everything, ask to see the loan papers, the Chanote, talk to the 'Village Fund'. Everything. Have it all translated or take it to a lawyer. If you discover this is a 'legitmate' problem it is up to you if you want to 'sort it out'. If you sort it out you may want to take some safeguards so it doesn't happen again. If the family won't let you see any of the documents you may want to rethink your relationship. Back in the US I trusted everyone until they proved me wrong. In Thailand I have learned from experience not to trust anyone until they prove trustworthy. Even then I have reservations and exercise caution. "Let's shake hands on it... but... can you also sign this agreement?" Link to comment Share on other sites More sharing options...
motlau Posted October 26, 2015 Share Posted October 26, 2015 There are a lot of IFS here Firstly how things are with your wife --how long have you been with her do you trust her --really trust her!! ,does she always tell you the truth --is she in the pocket of her father or brothers or any of the rest of them, how much land do the family have and how many other loans ,a piece of their land has almost certainly been committed to support the loan does it have have the family house or anything if value on it If you have any doubts and I mean any doubts it is 99 per cent certain you are being scammed If after all this you decide to clear the loan and really its either clear it all or nothing you should insist to your wife and the family that the land certainly and land with the family house on be transferred to her name, no ifs no buts certain ,this means that they cannot go out and borrow from it again ,my experience with my wife's father is that he kept borrowing until he had no land and then tried an unsecured loan from a friend who expected my wife to clear it ,only when she refused point blank did the borrowing stop As an aside she owns all her families land and when the brothers come round whining for their share she tells them that they can have their share after the parents die and after all the costs of the funerals have been deducted By the way do not believe for one second that there is any legal redress, the village loan sharks are many and very influential and have the whole thing organised ,the absence of any banking easily available to poor people is why they are used ,borrowing from the bank involves endless all day visits to distant banks and being treated like sh*t by the staff ,the local moneylender is easy ,sign over the land as collateral and away you go ,it may not be right or fair but that's the way it is Link to comment Share on other sites More sharing options...
prakhonchai nick Posted October 26, 2015 Share Posted October 26, 2015 My wife works for a District office that oversees these village funds. Normally they will charge 1% per month, if the loan is repaid in a proper manner, but 36% is "Bull"! I suggest you talk with your wife and get the truth from her or take her to your local District Office and talk with the person who oversees those loans in your village!! This could be just a shakedown of the Falang! Even at 1% a month I smell a rat! Villagers repay after 12 months, with 6% interest and are then eligible to re-borrow. After a couple of weeks the new money has arrived. To enable many to repay, they will take out loans in their villages at 3%-5% for the short time until new money arrives. Link to comment Share on other sites More sharing options...
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