Take Loan against Your Means, Living as Surety

Instant approval, No documents required! Zero p.c. interest. Terms up to 20 years.

These are all catchphrases of different loan schemes that an average person of Kerala faces everyday. The only qualification you require – to be able to prove that need no loans.

Ironical but true, loans are sold to persons who don’t just want a loan at the time. Persons who badly require a loan have to make in excess of hundred trips to his/her bank to prove he/she has or will have the facilities to repay the loan.

Imagine the following situations

A farmer/small scale business man: “Sir, I am in a bad financial condition and I need a loan”
Banker: “Really, come back with the documents proving the ownership of your home and walk around in knees.”

Financially well settled person: “Hey, I don’t have new projects and need no loans now.”
Loan sales person: “Sir, you are a VIP Customer of ours for years and you have pre-approved loan. You can use the money to buy a new car or import a Chihuahua from Italy”

The unsuspecting VIP customer, mostly against his/her better judgment decides to take the money for time being.

What is the interest rate? Oh, it is just 2 %. Wow, wonderful are you sure my dear financier? Yeah, it is true, our interest rate is only two percent for a month.

A month? That is 24% a year.

It can be said that way too, a head-scratch by the banker but quickly regain posture.

Sir, we have special offers for our VIP loan customers – special privilege gold credit card, chances to participate in lucky draws…

Finally the VIP customer decides to take the money.

After a while the VIP customer loses his means to repay the money, what happens next? Read about loan re-collection techniques adopted by banks and financial institutes.

Banks, Loans and Debts

Two of my friends lately attended a job interview. The job they are supposed to do – to collect outstanding loan dues from customers of major private banks and financial institutions. On hearing their interview experience, a lot of things flashed through my mind.

Employing persons to collect outstanding dues is not new news in Kerala. I think it is the same everywhere in the world. The modus operandi of collection agents is disturbing. If a customer defaults payment for a long time, the financial institution – icici bank, hdfc, citi financial among countless others – refers the responsibility of collecting outstanding dues to so called collection agencies.

The collection agencies and agents say they never use coercive techniques – only in saying. The action of collection agents gives hell of a time to debtors. I agree, they have failed to repay the loan they have taken, but now they have to pay back with more than money.

The first tactic of the agents is to frequent the debtor’s home on a regular basis. They just don’t visit the home, but also make sure everyone in the neighbourhood know their purpose of visit. The debtor will be faced with questions regarding his (her too) loan. Needless to say it is more than embarrassing for the debtor.

About persons who have taken vehicle loans – the collection agents come and pick the vehicle itself. All loan providers use this. There are several tight skinned persons who are more than happy to leave their vehicles with their financier for as much as three months.

I doubt what the loan due collection agents will do to defaulters of home loans.

To who are the banks, and loan collection agents doing this is another story about selling bank loans.