|Students borrowing money with high interest rates from illegal lenders who provide easy loan procedures may face complicated consequences.— Photo baodautu.vn
HA NOI (VNS) — Students borrowing money with high interest rates from illegal lenders who provide easy loan procedures may face complicated consequences.
A student at the University of Economic and Technical Industries' Information Technology Faculty, who wished to remain anonymous, said he urgently needed VND5 million (US$220) to run his business, which forced him to borrow the money at a high interest rate from a pawnshop near the university.
He had to give the lender a Dell Vostro laptop worth VND18 million ($800) as well as his student card as collateral.
The interest rate was fixed at VND15,000 ($0.6) per day, well above regulations.
After three months, the student had to pay nearly VND7 million ($310) in both principal and interest.
"For a student, paying this much money is not easy," he said.
The Lao dong (Labour) newspaper observed many leaflets stuck on walls and electric poles on different streets near schools in Ha Noi, such as Ho Tung Mau, Giai Phong and Truong Chinh, advertising loans with illegal interest rates.
Another third-year student, who also wished to remain anonymous, said she had taken a loan at a high interest rate and had used the money to pay her school fees.
She borrowed VND3 million ($130) and had to pay VND180,000 ($8) per month in interest.
However, in the following months, her parents gave her very little money, so she was unable to pay the principal and interest.
To Vu Tuan, an expert from HD Bank, said the interest rate for a bank loan was between 15 per cent and 16 per cent per year, whereas the illegal interest rate was as high as 110 per cent to 180 per cent per year.
"It is much too high," Tuan said.
Tuan urged people not to borrow money from shops with illegal high interest rates, as such loans carried heavy risks. — VNS