Average Private Loan Is 10 Million Won with 245 Pct of Interest

According to a survey, people who depend on the private loans borrow about 10 million won in average and pay back with 245 percent APR.

The Consumer Protection Center of the Financial Supervisory Service released the statistical report on the 2329 reported made by the customers from April to August this year. FSS requested for the investigation of 488 cases to the police and the prosecutors office.

Particularly, 10 percent (43) of them were related to credit borrowed in small amount to pay off delayed bill or to help customers to get credit cards illegally in order to take high interest from them.

According to the analyzed material, the victims loaned about 10 million won in average and 67.6 percent of them borrowed less than 5 million won. And most of the victims were those who needed money for emergencies.

The average interest was 245 percent and 11.5 percent borrowed the money with over 500 percent APR. The private interest has been lowered by the continuing control, from 259 percent in April to 203 percent in August.

35.5 percent of reports were about the high interests and 13.9 percent of the reporters complained about such illegal activities as unreasonable calculation of interests or issuing checks with wrong amount of money. 3.6 percent of the victims appealed to the FSS about the threatening and violations.

Lee Hoon dreamland@donga.com