Do you think this actually happens in real life?
By ahgong
@ahgong (10064)
Singapore
June 11, 2008 1:21am CST
I was reading the joke that was circulating among my friends one day and found it to be quite plausible.
Here is the joke that was posted:
[i]A Chinese man walks into a bank in New York City and asks for the loan officer. He tells the loan officer that he is going to China on business for two weeks and needs to borrow $5,000.
The bank officer tells him that the bank will need some form of security for the loan, so the Chinese man hands over the keys to a new Ferrari parked on the street in front of the bank. He produces the title and everything
checks out.
The Loan officer agrees to accept the car as collateral for the loan. The bank's president and its officers all enjoy a good laugh at the Chinese for using a $250,000 Ferrari as collateral against a $5,000 loan.
An employee of the bank then drives the Ferrari into the bank's underground garage and parks it there.
Two weeks later, the Chinese returns, repays the $5,000 and the interest, which comes to $15.41.
The loan officer says, 'Sir, we are very happy to have had your business, and this transaction has worked out very nicely, but we are a little puzzled. While you were away, we checked you out and found that you are a multi-millionaire.
What puzzles us is why you would bother to borrow $5,000?
The Chinese replies:
'Where else in New York City can I park my car for two weeks for only $15.41 and expect it to be there safely when I return.'
[/i]
Do you think it actually happens in real life?
Does the bank actually take care of the collateral when you take a loan with them?
3 responses
@34momma (13882)
• United States
12 Jun 08
As a New York, i can so see something like this happening. Do you know how much it cost to park your car in a garge for 2 weeks? almost $1,000. As for the question does the bank take care collateral, they have to because if they want their money back then they have to give you what belongs to you.
@applefreak (3130)
• Singapore
11 Jun 08
hahaha i really like this joke. while that bank officers think they are smart. it's actually the man who beats them all. in real life it won't happen, at least not in singapore. here all the collateral are just paper form. if you mortgage you home, they'll take the deed. if you mortgage your car, they'll take the log card. so far have not heard banks taking assets as collateral for personal loan though. cheers.
@ahgong (10064)
• Singapore
11 Jun 08
This is also the first time I heard of banks taking the collateral literally.
Interesting isn't it?
Here the banks only take the paperwork. What happens if the collateral is damaged or stolen during the period of the loan? Who is responsible for the loss then?
@applefreak (3130)
• Singapore
11 Jun 08
hmm i guess insurance will take care of it. banks usually only take property or vehicles as collaterals. vehicles must be covered by insurance. maybe property must be covered by fire insurance before banks give out mortgage loan? this is an interest thought though. who is responsible for the loss if something happens to the item?
@gwenns (255)
• Singapore
11 Jun 08
LOL! Interesting~ took me a while to get the joke =P
Anyway, I'm also wondering if this happens in real life, but I guess banks might take care of all collaterals because it might ruin their reputation or lose out if the collaterals are ruined due to their negligence. I don't know, I still haven't tried asking a loan from bank =P
@ahgong (10064)
• Singapore
11 Jun 08
I don't know about whether the banks will take care of the collateral or not.
Where I live, the banks do not collect the collateral physically. They only do the paper work to say that the collateral is theirs during the loan period.
I wonder who is liable for damages or loss of the collateral during the loan period.
