Tyrannical Private Loan Annual Interest Rate, 1,440 %

The average interest rate of those who had been victimized from the private loan business amounted to 251 percent a year.

The Financial Supervisory Service (FSS) revealed yesterday, that the private loan victims reported during April 2 to June 13 that they have been charged from at least the annual interest of 60 percent up to the maximum annual interest of 1,440 percent, amounting to the average of 251 percent a year.

For the victim pattern, the excessively high interest rate occupied 46.5 percent (713 cases). And it was followed by the excessive interest charge for the delayed payment and the unjust disposal of the customers` collateral which were offered as security on loans (13.9 percent), and the violent and illegal debt collection methods by such loan sharks (4.7 percent, 71 cases).

The reported amounts are as follows; ▲under 2 million won (36 percent), ▲2 million won - 5 million won (33 percent), ▲ 5 million won - 10 million won (15 percent), ▲ over 10 million (17 percent). The small amount of loans under 5 million won reached 69 percent.

The FSS told that it notified the suspicious 421 private money-lending companies out of 1534 reported cases to the National Police Agency, the Korea Fair Trade Commission, and the National Tax Service.

The FSS is running the `financial information center for the common people` in the Mutual Savings and Finance Companies Association, in order to counsel those who need the urgent loans with a good credit record.

Lee Cheol-Yong lcy@donga.com