Originally posted by ndmmxiaomayi:
At least they are legal. I guess the difference is banks is one-off interest (24%), and loan shark is compound interest. Loan shark will roll and roll until the snow ball very big. Banks will also roll and roll, but not quite sure if it will be as huge as the loan shark loan. Correct me if I am wrong.
By being made to legal to raise interest charge midway at usurper's crippling interest at 24% the bank is actually using its legal power to bankrupt poor people.
If bank is given the protection or legal power to raise interest to 24% it should not abuse such power to bankrupt the poor borrowers. If anyone operates with state power behind it, it should be more moderate and reasonable in its lending rate.
After all the state will not allow loan sharks tp charge such crippling interest which even without compounding can be crippling to people.
By being allowed legally to raise interests of this kind, bank should not abuse its power and should practise moderation since it is not being treated as loan shark. Bank should not try to take advantage to be worse than loan sharks.