Illegal loan sharks are lending money at sky-high interest rates of as much as 1,630 percent per year. (Image : Pixabay)
SEOUL, April 4 (Korea Bizwire) – Illegal loan sharks are lending money at sky-high interest rates of as much as 1,630 percent per year.
According to data from the Consumer Loan Finance Association (CLFA), the total amount of money borrowed from loan sharks last year was 14.7 billion won, and the average length of a loan was 48 days. The amount of money returned was 17.3 billion won, resulting in an effective average annual interest rate of 1,630 percent.
The number of short-term loans was the highest (137 cases). Signature & security loans ranked second (92 cases), followed by daily installment loans (33 cases).
If caught, unregistered loan businesses can be fined as much as 50 million won, with those responsible facing prison sentences of up to five years.
In addition, if unregistered lenders violate interest rate regulations (25 percent at the most), they can be fined as much as 30 million won, or go to jail for as long as three years. They also have to return the amount of overcharged interest collected.
Damages caused by high interest loans can be reported by calling the CLFA (☎ 02-3487-5800).
By M.H.Lee (mhlee@koreabizwire.com)
