About 20,000 college students have taken high-interest loans to buy fancy electronic products, mostly Apple devices, in central China’s Wuhan city.
From the start of January 2012 to the end of February 2013, students had applied for loans of 160 million yuan ($25.76 million) from Home Credit China (HC China), a subsidiary of international investment business PPF Group, reported Xinhua.
“We have lost touch with about 100 of them, getting no response to calls or letters reminding them about delayed payments,” said Liu Mingwei, Wuhan regional manager with HC China, on Wednesday.
With about one million students in Wuhan, it means about one in 50 of them are shouldering HC China’s heavy annual interest rates of up to 47.12% on a 12-month-term loan. About 90% of the credit was used to buy Apple products, such as iPhones and iPads, and other high-end electronic products, said Li.
HC China provides credit loans in nine, 12 and 15-month terms for college and university students, provided they can present an ID card, bank card and student ID card. Loan amounts range from 540 to 10,000 yuan.
“Quite different from the loan approval process in a bank, HC China passes the credit loan application in as little as dozens of minutes,” according to Zhang Zheng, a HC China salesman in Wuhan. Then, students can take away goods after paying a down payment in HC China’s partner stores.