Man from Foshan Borrows 1,000 Yuan Online, Ends up owing 2,000 in Three Days, Goes Viral

In Guangdong Province, a man from Foshan urgently needed money and borrowed 1000 yuan (RMB) online, but had to repay double the amount within 3 days, with a penalty of 600 yuan in interest per day for late repayment. This news made it to the top search on Baidu on December 23.

Reported by Guangdong TV on December 22, Mr. Huang from Foshan downloaded a loan app due to his urgent financial needs. To his surprise, upon registering and checking the loan amount, he was immediately forced to accept the loan.

In a video, Mr. Huang expressed that he initially wanted to borrow 2000 yuan, but the app only allowed him to borrow 1000 yuan. He was required to repay 2000 yuan within 3 days, with a daily penalty of 600 yuan in interest for late repayment. Moreover, the repayment could not be done through the app; he had to transfer the money to a specified personal account within 15 minutes.

This news stirred discussions among Chinese internet users.

One netizen calculated a scenario: with roughly 30 days in a month, the 3-day interest amounts to 1000 yuan. Therefore, the annual interest for this loan would be: 1000 x 365 ÷ 3 = 121,666.67 yuan, which translates to an exorbitant annual interest rate of 121,666.67%! Normal loan interest rates generally do not exceed 36%, so any rate surpassing this range is typically categorized as “usury.”

Netizen “Dan Dan Buys Cosmetics” remarked: “This online loan is outrageous, a typical usurious practice! Everyone must be vigilant and avoid falling into these traps of online loans, as it could lead to significant trouble if unable to repay later.”

Another netizen said: “Loan scams are truly deceitful, the interest rates are frighteningly high, and they play word games. One can easily fall into these traps unintentionally. It’s crucial to report such online loan companies to prevent harm to many people.”

In recent years, Chinese citizens have been plagued by online loan issues. According to data from “36 Kr,” as of November 25, 2024, there have been 7178 complaints about “repayment deadlines” and a staggering 46,015 complaints regarding “forced borrowing.”

“36 Kr” stated that any loan with an annual interest rate exceeding 36% could be deemed as usurious. According to Chinese regulations, the portion of the annual interest rate exceeding 36% is considered usurious and not legally protected.

On December 22, Chinese media personality “Polar Dream Chaser” cautioned everyone, emphasizing that while many might find online loans “convenient” at first glance – simply downloading an app, providing some information, and quickly receiving money without having to seek help or put up collateral – there are numerous traps hidden behind this apparent simplicity.

These traps include: 1. Forced borrowing, similar to Mr. Huang’s experience, where merely checking the loan amount resulted in being forced to accept the loan. The platform traps users by stating, “You have received the funds,” leaving them no way out and forced to repay the loan; 2. Hidden fees, despite seemingly low interest rates, platforms often increase borrowing costs significantly through various hidden charges like “service fees” and “processing fees”; 3. Many online loan platforms impose excessively high penalty interests. In Mr. Huang’s case, an additional 600 yuan is charged for each day of delay. This compounding interest mechanism easily traps individuals into a vicious cycle of “unable to repay, accruing more debt.”

“Polar Dream Chaser” advises individuals in need of online loans to carefully read the terms and not jump into it rashly: be wary of low thresholds and high temptations, legitimate lending institutions usually don’t lend to unqualified individuals easily; prioritize choosing reputable institutions; borrow responsibly based on your capacity and consider your repayment ability before borrowing – avoid falling into the “bottomless pit” of online loans for short-term financial needs.