Expensive village loans

[Liquorice]

Sounds like a loan from the village 'loan shark' at those rates.

Many Thais work cash in hand, self employed, small businesses and don't earn enough to pay income tax, or for that matter earn enough to open a Bank account.

They have no credit rating history and therefore cannot get loans from a Bank.

If they can't secure loans from the family, local 'shark loans' are the only alternative left.

These unscrupulous money lenders use threats and violence in the event of default on payments and the interest just compounds.

The lender usually has no idea of what the total repayments will be, the collector just keeps calling every month.

[mike324]

well first thing to find out if the "village fund" is through a government organization, or some loan shark running it? With that type of interest, it sounds more like a loan shark.

[timsims]

Remember this is not your problem if you make it your problem
they will take you to the cleaners I think its all about
extracting money don't help don't get involved

[kinmaew]

Why are they telling you this? Do you give a sh** about Thais and their debts if not just RUN mate it sounds like another "Thai disaster" waiting to happen (to YOU)

[kensisaket]

That is a situation that is common in Issan. The question now is not whether or not it is excessive; but, how are you going to pay it off AND prevent it from happening again. The only way you should get involved in the repayment is if you can prevent it from happening again. Pretty much the only way to do that is to have your wife's name put on the house/land registration papers (chanote). That way the person(s) who got you into this situation cannot repeat it without your wife (and hopefully you) signing off on it beforehand. Good luck.

[realenglish1]

Under no circumstances would I pay it for them Not your responsibility, You will never know if it is real or a made up loan. What would they do if you where not on the scene

Stupid family

[Nomyai]

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.

A house built by farang has no resale value as poor thais cant afford to buy and no intelligent farang would buy.

So it really doesnt matter if papaers are proper.

[Liquorice]

I'll give you an example.

A Thai friend of mine set up a small café shop 3 years ago.

She wanted a small induction type pot to cook meats etc but was a bit strapped for cash.

The local loan shark provided her with the pot at an agreed repayment of 200BHt per month.

It recently broke and she asked me if it could be repaired....it couldn't.

Now armed with a little more cash she purchased a new one....cost 1,800BHT.

She is still paying for the old pot and it was only when I did the maths on her repayments that she questioned it.

So far she has paid 6,000BHT for a pot that cost 1,800BHT.

She asked to settle the debt and was told 500BHT, which she paid. Total cost 6,500BHT.

She also borrowed some cash from the same loan shark to purchase a second hand car.

The car was 5 years old, 300,000 baht.

She is paying 10,000BHT a month, so has already repaid 360,000BHT.

She has no idea what period the loan is over and what her total repayments will be.

Sorry, but Thais are stupid, illogical and ignorant when it comes to borrowing money.

They give no forethought to the future and how this debt will affect them or their family.

[mikiea]

how many in the family are gainfully employed ?............. there is a formula to solve this problem ,.... X debt = unemployed males /employed females x leo price + 23 divided by money in foreigners bank account .

[shirtless]

Thais can be really undisciplined with easy credit , you cant help them long term they are programmed as total consumers and most want it yesterday , dont get involved as it will lead to more bad loans

[Jip99]

I'll give you an example.

A Thai friend of mine set up a small café shop 3 years ago.

She wanted a small induction type pot to cook meats etc but was a bit strapped for cash.

The local loan shark provided her with the pot at an agreed repayment of 200BHt per month.

It recently broke and she asked me if it could be repaired....it couldn't.

Now armed with a little more cash she purchased a new one....cost 1,800BHT.

She is still paying for the old pot and it was only when I did the maths on her repayments that she questioned it.

So far she has paid 6,000BHT for a pot that cost 1,800BHT.

She asked to settle the debt and was told 500BHT, which she paid. Total cost 6,500BHT.

She also borrowed some cash from the same loan shark to purchase a second hand car.

The car was 5 years old, 300,000 baht.

She is paying 10,000BHT a month, so has already repaid 360,000BHT.

She has no idea what period the loan is over and what her total repayments will be.

Sorry, but Thais are stupid, illogical and ignorant when it comes to borrowing money.

They give no forethought to the future and how this debt will affect them or their family.

The last paragraph sums up why there are so many Chinese-Thai landowners and why there are so many 'agents' offering borrowing from Bangkok et al money lenders..

[dotpoom]

You ask if it's legal..and at the same time you say you found out it's not legal?

[chilli42]

Don't do it, there will be no end to the pitiful excuses they come up with for more and more. They are testing your resolve. If you are thinking that saying "This is the last time...." It won't work. Next time, find a Thai wife who is an orphan.

[NoshowJones]

Don't do it, there will be no end to the pitiful excuses they come up with for more and more. They are testing your resolve. If you are thinking that saying "This is the last time...." It won't work. Next time, find a Thai wife who is an orphan.

What about the orphan who has Aunts, Uncles, Grannies etc, who have been looking after her.

Make sure the soon to be wife is employed, and always has been since she left school, college etc, that way she will

be able to look after her immediate family financially, which should not be your problem unless you are stupid enough to let it.

[Chao Lao Beach]

Run Away

[puchooay]

So many bitter and twisted people on this thread.

Why oh why do people rush into things when there is no trust?

The comments about lying and having to lock up land papers and car log books is so sad that I laughed.

[kennypowers]

The first thing you do is fully investigate the situation yourself. This immediately shows that you aren't a gullible foreigner and don't mess around when it comes to weeding out the lies and efficiently handling such matters. Find out who loaned them the money and arrange a meeting to see the paperwork/agreement. If need be hire an interpreter for 1000 Baht a day and take he/she with you to the meeting, to the district office, and if need be to the police station. You'll save yourself a lot of money in the long run taking this approach. If it turns out to be true, pay it if you are rich and that amount of money is nothing to you, but make sure you tell them you will never ever pay off a loan again, and if they take one out you will leave the family. Don't pay it if you are struggling yourself or simply don't want to.

[whatproblem]

That is a situation that is common in Issan. The question now is not whether or not it is excessive; but, how are you going to pay it off AND prevent it from happening again. The only way you should get involved in the repayment is if you can prevent it from happening again. Pretty much the only way to do that is to have your wife's name put on the house/land registration papers (chanote). That way the person(s) who got you into this situation cannot repeat it without your wife (and hopefully you) signing off on it beforehand. Good luck.

And get an usafruct for yourself on the land and if you have a child then lease them the land for 30 years

[pbonline]

Be happy, this is your chance to get a new wife

[sead]

1 year my ex needed money for boy schoolbooks. Cloths for starting school(he still hasnt started). Boy throw rock on a Mercedes. Someone in family die.not answering my calls she says phone not good.i buy new one and guess what. Now battery empty.

Its actually hilarious once you understand how they think. After 2 years i kicked her out lasy week. Never slept so good as now.

No more dreaming about some sick buffaloes. Only pink elephants after my good night out

[Autonuaq]

you did not have the loan,

nor did they ask you about it.

If you help them out now, next time you have do too.

at the end you are home and broke and have nothing.

You are the faring, if you are in need for short time they not help you out.

pity but a fact in most cases.

Be wise and stay away for this kind of business and manipulation to get your involved..

[Gracas]

What security did the family put up for this loan ?

Your house ? Or you ?

[khunPer]

36 percent is 3 percent a month, or as Thais says: “3 bath”.

As Kovaltech says in post #26

( http://www.thaivisa.com/forum/topic/865568-expensive-village-loans/page-2#entry10004048 )

an “official” village loan is more like 3 percent a year, or even lower than that.

The maximum allowed interest rate (for private loans) is 15 percent p.a. (a year). If it’s as much as 100,000 baht the family should consult a lawyer and for example let him/her bring it to court; then 15 percent will be confirmed and payment can be made through the court – the judge may even lower it or give a discount.

[hocuspocus]

I'll give you an example.

A Thai friend of mine set up a small café shop 3 years ago.

She wanted a small induction type pot to cook meats etc but was a bit strapped for cash.

The local loan shark provided her with the pot at an agreed repayment of 200BHt per month.

It recently broke and she asked me if it could be repaired....it couldn't.

Now armed with a little more cash she purchased a new one....cost 1,800BHT.

She is still paying for the old pot and it was only when I did the maths on her repayments that she questioned it.

So far she has paid 6,000BHT for a pot that cost 1,800BHT.

She asked to settle the debt and was told 500BHT, which she paid. Total cost 6,500BHT.

She also borrowed some cash from the same loan shark to purchase a second hand car.

The car was 5 years old, 300,000 baht.

She is paying 10,000BHT a month, so has already repaid 360,000BHT.

She has no idea what period the loan is over and what her total repayments will be.

Sorry, but Thais are stupid, illogical and ignorant when it comes to borrowing money.

They give no forethought to the future and how this debt will affect them or their family.

Poorly educated and very gullible is more like it and many countries in this region will remain like this for a long time as the system of control of the people does not require the masses to be well educated.

[bazza40]

You will certainly be more respected if you say no rather than yes. You also need to drag out all the details of this supposed loan - paperwork, security offered, term etc. Although, as other posters have said, it is indicative of loan sharking.

It's like dealing with children. You need to set boundaries. And if they can't accept those boundaries, walk out.

[ToddinChonburi]

You can buy a lot of Buffalo for that amount .

[Robert24]

Sounds like a loan from the village 'loan shark' at those rates.

Many Thais work cash in hand, self employed, small businesses and don't earn enough to pay income tax, or for that matter earn enough to open a Bank account.

They have no credit rating history and therefore cannot get loans from a Bank.

If they can't secure loans from the family, local 'shark loans' are the only alternative left.

These unscrupulous money lenders use threats and violence in the event of default on payments and the interest just compounds.

The lender usually has no idea of what the total repayments will be, the collector just keeps calling every month.

not a loan shark. Loan sharks give small amounts up to like 5000 baht, unsecured at something like 2-3% per day! not 36% p.a.

I suspect this to be a normal non-bank loan from another person at 3% per month with land/chanote as collateral.

[crazykopite]

Last year I went to my local store and purchased a combination oven it cost 15,000 baht at the time , the salesman arranged delivery for the next day to my home and true to his word he turned up the next morning with my new oven ! Two weeks later the same salesman appeared on my doorstep begging me to lend him 100,000 baht to pay for an operation for his 9 year old daughter who apparently was on her deathbed, after a number of questions put forward by me , name of daughter, what hospital and ward number as well as the doctors name and telephone number and he failing to answer any of them I concluded that the guy was taking me for a ride, I had only met this guy for at the most 30 minutes and here he was with sum trumped up story asking for a 100,000 loan. By the way this was a major store not some side street shop !! The truth was he was most probably up to his neck in debt by gambling and saw me an easy touch farang needles to say I sent him packing and never saw him again !

[crazykopite]

You can buy a lot of Buffalo for that amount .

If you live on Koh Samui a buffalo would cost you 500,000 baht !

[swissie]

What security did the family put up for this loan ?

Your house ? Or you ?

If land is in name of wife/family and was put up as collateral. Fine. It only becomes a problem if Farang has built a nice house on the property in the meantime. In this case, Farang is very much involved in the financial "well being" of the clan.

It might be too late to "run for the hills".

Cheers.