Guys what you mean by defer payment ? How will it caused the loan to snowball
It goes like this. Initially, the loan is say 1000, 1400 to clear and 400 as defer payment. In the perfect world, if you have 1400, you can make a clear payment to them and they will consider the loan settled. So you borrow 1000 you pay 1400. If you didn't do anything with the money, your cost will be 400 as interest.
Defer payment means either 1) you cannot pay the 1400 to clear, so you pay 400 to pay the 1400 at the next payment date (1 week, 5 days, whatever), or 2) you can pay the 1400, but they give tons of excuses why you can't pay that 1400 today (no account, worker sick, worker go back Malaysia etc), so you have to pay 400 to pay 1400 at the next payment date. Still with me?
How the loan snowballs, is by multiple deferred payments, your cost will go up significantly. Imagine you defer 3-4 times like what some of us did. 400 x 4 is 1600. On top of that, you still need to pay 1400 to clear the loan. So you will pay 1600+1400 = 3000 to clear a 1000 loan. Your cost is almost 2000 in interest just to clear that loan. And that 3-4 times defer can go by very quickly. Those 7 day loan one just defer a month and magically the amount explodes. Those 5 day one lagi worst.
This effect is magnified when the loan amount is small, because most WAAL (WhatsApp ah long) charge very high interest in small loans. $350 loan clear $550 defer $200. Defer 2 times and he already earns back the base just on interest alone. You get my point?
I think they short of acct to let ppl loan or return?
Will the police inform bank to stop the account if its being reported?
I am not sure if police informs the bank and the bank freezes accounts just based on that, because it is unclear if it is a debtor or runner or ah long account that they are freezing. if they freeze every account that has been reported, that's a lot of legit debtors whose accounts will be frozen. I believe they will only freeze if the police has given clear evidence that the account is primarily been used for ah long. Again, all speculation.