I have always been a ghost nairalander until i created this account solely for this post. I would deeply appreciate if it makes front page.
It started sometime last year whille i was in school, my dad was in need of money and his friend introduced him to another friend who was an agent of a money lending cooperation inwhich my dad obtained a loan of 200k with a monthly interest of 22k monthly. my dad has been paying this said interest of 22k monthly for the past 10 months consecutively without fail. I got to know of these and I advised him to inquire from the said agent if there is any way we can be paying the capital instead of continuing paying the intrest wich we have clearly paid above the capital in jus 10 months.The response he got was that he has to pay the present month intrest of 22k and the whole 200k together. The thing is things has been on the rough sides and I know how hard my dad labours to pay this intrest monthly which Is not deducting anything from the capital. This all happened last week. This week the said agent and the owner of the cooperation came to our home and made threats of locking up my dad and selling some of our property to recover the money.
They say a problem shared is half solved so dear nairalanders, I need your advice.

Ha

What’s going on?

That’s a brutal scam!

If my math is correct, the money lender is set to make 221% profit!

What was your father thinking

The interest rate is crazy

Wow
Did he sign any legal papers?

lovelybugs:
Wow Did he sign any legal papers?

No he didnt

Amanee:
What was your father thinking
The interest rate is crazy

I don't no

NGRsenate:
Ha
What’s going on?
That’s a brutal scam!
If my math is correct, the money lender is set to make 221% profit!

yes, i think

Legend108:


yes, i think

I think you should get the police involved but before you do that, if you know any local leader that the money lender fears, you can go and talk to him.

NGRsenate:


I think you should get the police involved but before you do that, if you know any local leader that the money lender fears, you can go and talk to him.

alryt, thanks

Wow. What a scam

Your dad must have borrowed from one of these Shylock private money lenders and not a cooperation.
The interest is too high.

.

Broad daylight robbery. If no legal documents were signed, i guess its time to ball out.

Lending above certain rates is illegal in places like the US, etc.

We might also have such provisions, here in Nigeria, against usury by the Shylocks of this world.

Try asking a lawyer here on elsewhere.

Going the legal route might be your recourse...

That is called "Sharp sharp " loan.
You have to pay the 222k,or continue paying the 22k monthly till you can pay the 222k.
.
Your Dad knew the terms of this loan before collecting. If he could,he would even collect another one.
.
I know of someone who borrowed 80k, was paying the interest monthly, then the govt stopped paying salaries so he defaulted in interest payments.
When he resumed repayment, he had backlog of interest plus principal, plus additional interest accumulating every month.
This went on for years that he had paid over 800k,yet the loan shark would not accept the payment of the principal until he cleared all the interest debt.
He eventually engaged the police to settle things between him and the loan shark. Police ruled on his behalf, had him issue a cheque of 80k to the loan shark to close the matter.

Don't blame your dad for collecting that loan, it was the only option he had at that time.

Involve the police, for matter like this one out police no de dissappoint.

Please get an attorney or involve the local police.

But attorneys cost money. If he can afford an attorney, he might as well have 220k to pay the loan shark.

That's a monthly interest rate of 11%. You have been paying that much because you've made no attempt to reduce the capital. Go to any bank in the world, your interest will remain constant for as long as you make no attempt to pay your capital. What you signed for is to always pay an interest rate of 11% (not 22k) on whatever is left. So when you pay 100k, your interest automatically drops to 11k (i.e. 11% of the balance).

An interest rate of 11% seems high but the reality is that most microfinance institutions in Nigeria offer similar rates (7-10%) with a reducing balance option (fixed interest rate on whatever is left of the loan).

I do not think a money lending firm will demand a fixed rate of 22k even when your loan is as low as 2k.

Get the right information before engaging the services of a lawyer.

He who goes a-borrowing, goes a-sorrowing

The borrower is servant to the lender -- Proverbs 22vs7