why most of the finance companies charge high interest to the customers?
By Rajesh babu
@Dasari100 (3791)
Anantapur, India
April 24, 2009 8:59am CST
I think they want to earn money as soon as possible so they don't consider customer views and thoughts because in my country so many private finance organizations but they don't mind people to ask money after giving so they are very particular about interest all the time.
I would like to know reasons about high interest
why the most of the people like to take finance,
have you ever take finance to anyone?
2 people like this
6 responses
@Sreekala (34312)
• India
25 Apr 09
Hi Dasari100,
The answer is so simple; they are doing business not service and they want to make profit from their business. If they are doing service the name won’t be like that. The reason for charging high interest may be they want to get back the money quickly and if the charges are high people who are taking money will definitely pay back the money quickly. Otherwise the interests may get double. There must be only one aim for their rules they want their money back at any cost with profits.
@Dasari100 (3791)
• Anantapur, India
25 Apr 09
But those companies Illegally charging more amount than other companies and i don't really understand people just taking more money from them. Last time i have seen one person unable to pay the loan then they scold him directly.
@Hvaniday1 (550)
• Malaysia
25 Apr 09
Ya....you are right. High interest = high yield. No customer here but you are a debtor to them. How high is your interest rate there? Watch out though, if interest rate going too high, something might going to happen.
@Dasari100 (3791)
• Anantapur, India
25 Apr 09
I think Private companies charging different rates, we can't guess equal rates for particular company some of them charge high interest and some of them charge low interest so we need to select best one.
@ninebags (145)
• China
25 Apr 09
Finance company like charging high interst because they want to earn more money, you are right at this point. I don't know about private finance organizations, but I know almost 40%-60% of banks' profit comes from fee-income such as interest, late fee and annual fee. People like to take finance because they don't have enough money to do what they want to do. I've taken finance from bank for 3 times, at really high interest rate, about 8%. This is personal loan, its interst rate is lower than corporate loan, interest rate of corporate loan could be about 15%, and even this number is much lower than the interest rate of private finance companies, maybe 20%-30%.
@Dasari100 (3791)
• Anantapur, India
25 Apr 09
I think they are gaining more money for giving loans to the customers even they don't care to collect money in rude way, they want to earn money that is all they need my friend.
@gitfiddleplayer (10362)
• United States
24 Apr 09
Because you are paying for a service, nothing is free.
@costas1234 (195)
•
29 Apr 09
Of course private finance companies charge higher risk applications higher rates of interest because the credit risk of default is greater. Those with no income and self employed with no good credit record get these higher rates. Finance of course can be used to go on holiday, home improvement, private health care, education fees. I have taken finance from banks but not finance companies.
