Desperate times call for desperate measures, and many who are financially stuck may fall into the trap of loan sharks, but here’s what might surprise you.
Even individuals from the T20 group, including Tan Sri and Datuk Seri, have sought help from loan sharks, with some ending up trapped in debts as high as RM7 million.
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The Centre for the Study of the Quran and Basic Religions has identified approximately 80,000 victims nationwide who are suffering under the intimidation of Ah Longs due to massive debts. The center’s chief negotiator, Adam Mustafa, revealed that professionals and television celebrities account for half of the cases handled by the organization.
An attempt to prove they can still afford a luxury lifestyle
According to Adam, other factors that facilitated the borrowing included investment failures, online gambling, life stress, and financial crisis. He added that many of the borrowers are used to the comfort of the luxury lifestyles, so when life hits them hard financially, they resort to the loan sharks just to prove that they can still afford the lifestyle, and that they still have money.
“These people usually pay in installments. If they can’t pay in full, they will pay interest first, but this will only lead to compounding interest.”
“They had no choice but to try every means to repay the money because they were afraid of being exposed, which would damage their reputation as members of high society,” he added.
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Adam also shared that he once handled a case where an individual borrowed RM7 million from loan sharks. He said the minimum amount typically borrowed is around RM1 million, and the interest rates can be terrifyingly high.
“According to calculations, if a loan of RM7 million is taken out, the total repayment amount could reach RM21 million, almost three times the principal.”
He further explained that some loan sharks deceive borrowers by posing as legitimate businesses, using tactics specifically designed to target the T20 group, as reported by Kosmo!.
“Sometimes, these T20 individuals do not have a good financial record and cannot apply for bank loans, but they have connections in the business world who can help arrange it.”
He added that such loans are often used as start-up capital for projects tendered by various parties, including government-affiliated entities.
Also read: M’sian Businessman with RM7 Million Debt Lives in RM250 Room Without Toilet, Uses R&R Facilities
