If you’ve heard about the term “loan sharks” before, then you probably know that there’s a lot of negativity associated with the services they offer.
Not only are they illegal lenders and target individuals who earn a low income or are desperate for getting their hands-on instant-access to money, but they are also very convincing. This leads to many people to make the mistake of accepting loans from them.
If you’re struggling with money during the month, or cannot pay your bills, it’s important to keep your options open as much as possible, and not cave into making hasty decisions, such as applying for a loan from a loan shark.
They will always appear friendly and given that you keep up with the repayment terms you’ve agreed upon, they might also not ask for more money.
However, nearly every loan shark either has some sort of angle when it comes to providing their clients with a loan or finds a way to make you pay more. Should you make one payment late, for instance, they are known to charge their clients an incredibly high percentage of interest, which have left individual struggling to repay the loan shark, let alone their debt.
The Risks of Borrowing Money from a Loan Shark
- You’ll pay a lot more interest by accepting a loan from them, rather than applying for a loan the legal way.
- They may harass or threaten you, should you fall behind on repayments. Many clients get calls from their loan provider on a regular basis.
- You could be pressured into borrowing more money, to repay a loan with another, which might seem like a good idea if you’re convinced that it will help but, it will seem next to impossible to repay the loan you’ve applied for.
How to Know You’re Dealing with a Loan Shark
Loan sharks are notorious offering you next to no paperwork, regarding the credit agreement/ records of the payments you make.
They may ask for items as a type of collateral security, such as your bank cards, driving license and passport. They are also known to refuse that their clients settle their debt, should they be able to.
They will also increase your debt and can add charges to the amount borrowed when they like.
Considering how dangerous and unpredictable it is to apply for a loan from them, one should avoid it altogether.