South Korean man gets suspended jail term for charging 628% interest on $5,800 loan

A 72-year-old man in South Korea has been handed a suspended prison sentence for engaging in usurious lending practices. The individual was found guilty of lending 8 million won (approximately $5,800 USD) and charging an exorbitant annualized interest rate of 628%.

Over the course of the lending period, which extended until 2022, the man managed to collect a total of 45.7 million won (approximately $33,000 USD) from the borrower. Investigations revealed that he had initially deducted 10% of the principal, amounting to 800,000 won, as an upfront fee, effectively lending only 7.2 million won. The borrower had already repaid the original principal within the first few months.

The Seoul Eastern District Court sentenced the man to four months in prison, suspended for one year. While acknowledging the severity of the crime, with excess interest totaling 35.9 million won, the court considered mitigating factors. These included the defendant's admission of guilt, his remorse, a lack of prior convictions for similar offenses, and his ongoing battle with Alzheimer's disease.