Easy loans store up problems for students
Source: Xinhua |
March 22, 2013, Friday
|
Print Edition
Print Edition
MORE than 20,000 college students have taken out high-interest loans totalling 160 million yuan (US$25.7 million) to buy electronic products, mostly Apple devices, in central China's Wuhan City.
The students applied for loans between January last year and this February from Home Credit China, a subsidiary of international investment business PPF Group, at interest rates of up to 47.12 percent.
Liu Mingwei, the company's Wuhan regional manager, said about 90 percent of the money was used to buy Apple products, such as iPhones and iPads, and other high-end electronic products.
"We have lost touch with about 100 of the students, getting no response to calls or letters reminding them about delayed payments," Liu said.
The company said it would report the bad credit of students who failed to pay back their loans.
Home Credit China provides loans in nine, 12 and 15-month terms for college and university students, providing they can present an ID card, bank card and student ID card. Loan amounts range from 540 to 10,000 yuan.
Zhang Zheng, one of the company's salesmen in Wuhan, said loans could be approved in a matter of minutes.
Students can take away goods after making a down payment in partner stores. Down payments range from 10 to 30 percent of the full price of the item.
In Wuhan, the list of partner stores includes major electronic products stores such as Gome and Suning.
The easily obtained loans push up sales but some stores have still refused to take part in the scheme. One store boss, who didn't wish to be named, said: "I counted the loan rate and refused such unscrupulous usury."
Yu, a student at Wuhan University of Science and Technology, said: "I used to feel isolated while others were discussing and playing with iPhones or iPads."
She bought an iPhone after securing a loan "in the heat of the moment," but said she regretted it afterward. Her parents helped her pay off the loan.
Wang Yong, a student at the China University of Geosciences, missed his March payment due to overspending.
"The salesman continuously called to warn me about the possible poor credit record, which would have a bad effect in the future," Wang said. He also had to turn to his parents for help.
Qiu Baochang, a lawyer with the China Consumers' Association, said the ease with which students can obtain loans was an incentive to irrational consumption.
In 2009, the People's Bank of China ruled that banks stop issuing lines of credit above 1,000 yuan to students.
The students applied for loans between January last year and this February from Home Credit China, a subsidiary of international investment business PPF Group, at interest rates of up to 47.12 percent.
Liu Mingwei, the company's Wuhan regional manager, said about 90 percent of the money was used to buy Apple products, such as iPhones and iPads, and other high-end electronic products.
"We have lost touch with about 100 of the students, getting no response to calls or letters reminding them about delayed payments," Liu said.
The company said it would report the bad credit of students who failed to pay back their loans.
Home Credit China provides loans in nine, 12 and 15-month terms for college and university students, providing they can present an ID card, bank card and student ID card. Loan amounts range from 540 to 10,000 yuan.
Zhang Zheng, one of the company's salesmen in Wuhan, said loans could be approved in a matter of minutes.
Students can take away goods after making a down payment in partner stores. Down payments range from 10 to 30 percent of the full price of the item.
In Wuhan, the list of partner stores includes major electronic products stores such as Gome and Suning.
The easily obtained loans push up sales but some stores have still refused to take part in the scheme. One store boss, who didn't wish to be named, said: "I counted the loan rate and refused such unscrupulous usury."
Yu, a student at Wuhan University of Science and Technology, said: "I used to feel isolated while others were discussing and playing with iPhones or iPads."
She bought an iPhone after securing a loan "in the heat of the moment," but said she regretted it afterward. Her parents helped her pay off the loan.
Wang Yong, a student at the China University of Geosciences, missed his March payment due to overspending.
"The salesman continuously called to warn me about the possible poor credit record, which would have a bad effect in the future," Wang said. He also had to turn to his parents for help.
Qiu Baochang, a lawyer with the China Consumers' Association, said the ease with which students can obtain loans was an incentive to irrational consumption.
In 2009, the People's Bank of China ruled that banks stop issuing lines of credit above 1,000 yuan to students.
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