Loaning money in Colombia at 8% interest per month.

cvivaspoorbuthappy says on Aug 28, 2009, 07:08:

8% is illegal. Maximum is 36% per year. I am working with a real estate investment firm to see if I lend at 2% with the real estate as a guarantee, basically a mortgage for up to 30% of its value with full legal guarantee on paper.

CV

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Aji1 says on Aug 28, 2009, 07:31:

Glad you called a spade a spade AZ.

Brian858: Is your buddy a gringo?? You infer but do not state this fact

I know not what course others may take; but as for me, give me liberty or give me death!

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Brian858 says on Aug 28, 2009, 07:35:

He is not a gringo. He gets his money from his sister in Miami. He said the only danger in it is that people get to know that you carry a lot of money with you.

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CakeDesigner-wannabe says on Aug 28, 2009, 07:49:

8% PER MONTH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

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kat1 (Moderator) (Trustee board) (☼Travelguide writer) says on Aug 28, 2009, 07:54:

Papi de Alejo says on Aug 28, 2009, 07:58:

That's a lot less than some of the "pay day" lenders charge in the US.

Live simply... Love generously... Care deeply... Speak kindly...

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davidyamiga says on Aug 28, 2009, 08:22:

It is a very dangerous proposition. Just like Coastal states. I certainly would not want to be involved in something like this.

Otra vez en casa...Cali!

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Aji1 says on Aug 28, 2009, 08:28:

That is my take on it as well. Too shady a business for a gringo to be doing this in Colombia. Te paga con plomo!

No thanks.

I know not what course others may take; but as for me, give me liberty or give me death!

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pedro (☼Travelguide writer) says on Aug 28, 2009, 08:29:

kenblanquito says on Aug 28, 2009, 08:45:

The high interest rates are required in order to pay for the lender's protection. A dangerous profession!

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Nucknfuts says on Aug 28, 2009, 10:13:

A saying I heard in Colombia is, Which person is more stupid,

The person that loans the money or the person that pay's it back ????

This is now what I ask anyone that asks me for a loan.

It works really good....

You are never lost, unless you don't want to be where your at.

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roloenNJ says on Aug 28, 2009, 10:41:

Not worth it to me! I value my life.

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spigrimace says on Aug 28, 2009, 11:02:

8% is cheap. "Gota a Gota" aka "pagadiario" is usually 20% in 6 weeks and it is actually more percentage-wise because you are paying back daily on day 1,2,3....40 or week 1,2,3,4,5,6. E.g. lend 100k and the debtor pays 20k a week for 6 weeks. 8% is cheap also because, look at a compraventa (pawn shop), they give you 50% at best of what an item is worth, keep the item as collateral, and then charge 10% a month, although you can usually negociate down to 7% or 8%, so 8% unsecured is cheap vs. that.

As an individual, it is quite a risky business and debtors would certainly walk all over a gringo. But, a lot of mafias do this lending such as the Oficina de Envigado or Oficina de San Javier. Do you want to take the chance and whack one of their guys? Almost all the lenders are front-man pawns that have a "patron" and if you whack the pawn, the higher-ups still have a copy of the signed card or letra and will be still calling in the debt and then probably, avenge the hit. To try and avoid getting wacked, most pawns wont lend more than a few 100k to someone.

That being said, I know people straight up people who lend higher amounts at around 7 or 8% monthly to professionals, who own their house/and or business and have a cosignor and nothing has happened to them. One of the guys I know has an accountant wife whose stature in the industry in Colombia would be akin to someone on FASB in the states. They use her contacts and will lend a couple millones to professionals and have done so successfully for years.

Also, it is so hard to get a loan here, the people are usually grateful to get the loan. Many times they have a business deal where they can say double the money, so paying a chunk of interest to a lender may still leave enough profit to vale la pena.

Jonas said: "fokin great idea! That's the way to learn about the real Colombia real fast!" and he is right so dont condemn the practice until you know enough about it and how it relates to the culture HERE.

I know someone in Medellin who takes investments for this type of business where the investor doesnt have to delve into the dirty work or take life risking chances and they pay the investor 35% a year on their money and guarantee the return. If you are interested in adding a different investment to your portfolio, PM me and I can hook you up with him face to face.

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excavator59 says on Aug 29, 2009, 22:06:

Moaning English teachers ,what do you expect when the c**** pay you last?.

Life is like a Pubic Hair on a Toilet Seat (Sooner or Later you get Pissed Off)

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