money lending business
By ddaguno
@ddaguno (3107)
Philippines
June 28, 2011 11:05pm CST
after 2 years of working in a different country I am going home and live in my country for good. I dont have any plans of going back to a regular job since my only option for that is to go back working in a call center. I dont want to relive those days so I plan to set up some small business here and there, just enough to sustain me daily.
A friend told me that she has officemates who want to loan money for interest so I thought that could be one source of revenue for me. but how much interest should I charge?
one example she gave me was this person lending 40,000 pesos for a year with a total interest of 16,000. 40%! I think that's too much. i think 20% is still high but i add only 20% then i get only 8k for a year. then i might as well just put the money elsewhere. So what do you think... can i have a profitable money lending business and still keep a good conscience?
1 person likes this
11 responses
@abatencila (970)
• Philippines
29 Jun 11
It will be a good idea that you are looking for a new business to venture. I guess there is no harm in lending business as long as you are fair enough. Maybe a charge of 2 percent per month will do. If somebody asks for 40000. then you will have 800 per month i think. That's not bad. Try to think of another business. Are you from the Philippines?
@abatencila (970)
• Philippines
30 Jun 11
Yes. If you can earn 2 thousand pesos from your two hundred thousand a month. Will that be enough for you? If yes, I can help you with that. That is a good business really because I'm doing it also right now. You have nothing to lose just choose the right people that you can really trust.
@SIMPLYD (90721)
• Philippines
29 Jun 11
I suggest that you have other legal ways of doing business, not money lending.
It's hard to lend money, specially if you do not know them personally, where they live and how is their paying capacity. Some people would pay interests for the first or two months, but after sometime they would be in default or cannot pay anymore. What's worse is they get angry with you, or put your life at risk.
Just think of other business , but not money lending business. Sometimes, your conscious would bug you for putting them totally indebted to you.
@SIMPLYD (90721)
• Philippines
30 Jun 11
I speak through experience because i did that before. I loaned them small amounts but in the end lost them when they cannot pay me their principals. Small amounts accumulates to a big amount.
Besides, my conscience bugged me into forcing them to pay me, when i can see that they really don't have the capacity anymore. 
@thesids (22180)
• Bhubaneswar, India
29 Jun 11
Hi ddaguno 
Well, 2 things - First, I am happy that you are going to your native after a long gap of two years and that is really a great news.
But the second thing that gets attached with this is that are you going to be offline? In that case, I am not sure about others, but I am going to miss a friend. and that is sad or it should be a sad news for me. But still, I hope that you would return back to MyLot 
Now for the discussion, well, money lending here in India is not that great a business unless you know how to recover the interests and the prinicipal. Though I have not much idea on this, I would say that please get into proper verification of the things that they would place to get the loan. And also have some contacts that can help you recover the amounts.
Well, 2 things - First, I am happy that you are going to your native after a long gap of two years and that is really a great news.
But the second thing that gets attached with this is that are you going to be offline? In that case, I am not sure about others, but I am going to miss a friend. and that is sad or it should be a sad news for me. But still, I hope that you would return back to MyLot
Now for the discussion, well, money lending here in India is not that great a business unless you know how to recover the interests and the prinicipal. Though I have not much idea on this, I would say that please get into proper verification of the things that they would place to get the loan. And also have some contacts that can help you recover the amounts.
i am going to ask a lawyer friend if he knows about interest rate caps and stuff.. anyway I still have a few months to prepare for it. thanks for your suggestion dear 
@marnice (60)
• Philippines
29 Jun 11
Good to hear your home for good. Working for 2 years away from your family is so hard. Here in our country especially in our office are also lending money with interest and usually the interest rate is 2%-3% in a month so your 40,000 will earn an interest of 14,400 in a year not bad. I think your lending business is profitable and still keep a very good conscience because instead of 40% you give it lower. You helped that person at the same time you earn.
@genesisgroldan (214)
• Philippines
29 Jun 11
I don't see any problems with having a money lending business. Well, because of the low economy today that we are experiencing people need to have a constant money on hand. And having those lending companies are also a great help. The only problem is that some lenders don't mind whether their interest rate is more than the limit. It's quite frustrating especially if you're the person in need and promise to pay back on time but having a difficult time because of the interest. I think that can also be a lesson learned to budget your money wisely.
@ddaguno (3107)
• Philippines
29 Jun 11
i believe in fixed interest and i plan on asking post dated checks as payment. that way, they really would pay me on time otherwise they get bank penalty... not very helpful i know, but this way i safe guard my business too and I dont add any late payment charges.
@hardworkinggurl (37063)
• United States
29 Jun 11
We have a lot of them here and yes I agree with you as many do resort to getting loans during hard times. 
While some do well paying it back there are those that later experience a hard time to pay them back.
But the concept behind it could be a life saver as so many could use the extra help from time to time.
While some do well paying it back there are those that later experience a hard time to pay them back.
But the concept behind it could be a life saver as so many could use the extra help from time to time.
@Rainegurl (2156)
• Philippines
29 Jun 11
Hi, ddaguno
The popular rate where I'm at is 10% per month. For example, one borrows from you ten thousand pesos, then he should pay you eleven thousand within the first month. If he fails to pay, that would be eleven thousand plus ten percent (of the eleven thousand) during the second month and so on and so forth.
The usury law here in the Philippines is currently not in effect. Thus, you can charge any rate you want. However, be careful not to become a loan shark, okay? 
While there is currently no ceiling in charging interest, if you and your borrower find yourselves in court, the court would reduce the rate you charged for as low as twelve percent per annum. No penalties for you but the rate you charged may not be used for being usurious.
Good luck and I hope you can think of and apply as many safety measures as you can so that no one would swindle you.
The popular rate where I'm at is 10% per month. For example, one borrows from you ten thousand pesos, then he should pay you eleven thousand within the first month. If he fails to pay, that would be eleven thousand plus ten percent (of the eleven thousand) during the second month and so on and so forth.
The usury law here in the Philippines is currently not in effect. Thus, you can charge any rate you want. However, be careful not to become a loan shark, okay? While there is currently no ceiling in charging interest, if you and your borrower find yourselves in court, the court would reduce the rate you charged for as low as twelve percent per annum. No penalties for you but the rate you charged may not be used for being usurious.
Good luck and I hope you can think of and apply as many safety measures as you can so that no one would swindle you.
@jaiho2009 (39141)
• Philippines
29 Jun 11
hello dda,
Welcome home my friend
Nice to hear that you are coming home and staying for good.
You can start a small business depending on your interests.
If you think lending is fine and you can relate with that kind of business then you can try ,you just need to know the way of trading,that matters most.
But if you have other option and you know other kind of business...give it a chance to consider too.
Take care and welcome home soon
Nice to hear that you are coming home and staying for good.
You can start a small business depending on your interests.
If you think lending is fine and you can relate with that kind of business then you can try ,you just need to know the way of trading,that matters most.
But if you have other option and you know other kind of business...give it a chance to consider too.
Take care and welcome home soon @hardworkinggurl (37063)
• United States
29 Jun 11
Hi ddaguno
I happy to hear you are going home. 
I bet the two years felt forever without your family.
It would be hard for me to suggest a reasonable interest rate as you do have to be careful with usery fees. See here if we dare charge way too much then the going rate we could be sued and users fees would mean that not only would the person not have to pay any of the loan back you as the lender would pay penalties.
Therefore, my suggestion is to check with your countries interest fee rates and if the usery is also something to be concerned about. Anyone charging way too much is considered a loan shark. As funny as it sounds here in the US it is serious business.
Good luck though and do hope you get this going and be successful with it.
I happy to hear you are going home. I bet the two years felt forever without your family.
It would be hard for me to suggest a reasonable interest rate as you do have to be careful with usery fees. See here if we dare charge way too much then the going rate we could be sued and users fees would mean that not only would the person not have to pay any of the loan back you as the lender would pay penalties.
Therefore, my suggestion is to check with your countries interest fee rates and if the usery is also something to be concerned about. Anyone charging way too much is considered a loan shark. As funny as it sounds here in the US it is serious business.
Good luck though and do hope you get this going and be successful with it.@ddaguno (3107)
• Philippines
29 Jun 11
Thanks hardworkinggurl I am so excited to go home! i can finally spend Christmas with my family.
I havent heard of any strict laws about money lending in my countries but I'm pretty sure there is a law. Just not aware of it. 
Thanks for the suggestion. I'll try to find out.
I am so excited to go home! i can finally spend Christmas with my family.
I havent heard of any strict laws about money lending in my countries but I'm pretty sure there is a law. Just not aware of it.
Thanks for the suggestion. I'll try to find out. @bhabycatch013 (9150)
• Philippines
29 Jun 11
hello ddaguno,
It is good to hear you are going back home
Well we've been into a lending business before but my parents gave up because some people don't know how to pay their debt most of them hide or went back to province and we can't trace them.
If ever you put up a business I would like to suggest it should be your passion something you can enjoy and profit from it.
Good luck
Happy mylotting
@ddaguno (3107)
• Philippines
29 Jun 11
thanks! just like the song says... Manila, Manila, i keep on coming back to Manila... simply no place like Manila 
it's messy, polluted and quite scary but it's home and I cant help but love it.
yep... i probably start a business that I really like... problem is, i dont know what my passion is. so i would have to look for other options that will sustain me for now.
it'll probably come in the future... may be some more soul searching will help
it's messy, polluted and quite scary but it's home and I cant help but love it.
yep... i probably start a business that I really like... problem is, i dont know what my passion is. so i would have to look for other options that will sustain me for now.
it'll probably come in the future... may be some more soul searching will help 
@donquack03 (131)
• Guam
29 Jun 11
Do what you must.
Charge fair for low payers. Build a customer base and loyalty.
Charge fair for high payers. They can afford it and they usually require more time.
Diversify your time wisely. Stay away from impractical matters. Take care and God bless you.
