So you think you need a loan shark? Are things really that bad? If so, then this article may help you change your mind. We’ll also suggest safer options to help you get the money you need. While you think you may need a loan shark, we’re here to prove that you don’t. In fact, here are 4 damn good reasons to never use a loan shark–and what you can do instead to find a safe, alternative loan.
Loan sharks Charge Up To 4,000 % or Higher Interest Rates
Can you imagine having to pay back such a loan? Illegal lenders in the UK currently charge interest rates this high, and sometimes, much higher. Its reported that 87% of victims who fall into this trap are never able to repay the loan. The interest rates are just too high. In other words, you’ll keep paying nothing but interest to the illegal lender, making it near impossible to ever pay the illegal lender back.
You’ll Put Your Life In Danger (and Your Family)
Unlike traditional high street banks, who follow ethics and regulations when it comes to collecting unpaid debts, illegal lenders will stop at nothing to get a return on their “investment”. In the United States and UK, a loan shark often may, initially, seem to be a great person. In fact, many times they are a respected individual that the victim trusts. It isn’t until the victim falls into a desperate financial situation that the loan shark shows their true self. The victim is offered a solution to their financial woes, and without thinking too much about it, accepts an inflated loan rate, thinking that they will easily pay it off asap.
Unfortunately, this is not the case. What will happen is after non-payment, the illegal lender will gradually begin barraging the victim with mental harassment. This quickly turns into threatening the borrower with physical injury and harm. Often times, this extends to threatening the borrowers family as well. For examples of how dangerous loan sharks can be, take a look at our article the most dangerous mafia loan sharks.
You’ll Be Stuck in a Never Ending Debt Cycle
As we mentioned above, very little of your payment will be applied to the principal. In most cases, the entire payment is applied to the borrowed funds. Remember, there are no rules or regulations for lenders who practice usury. They make their own rules. They’re isn’t much you can do, other than report them. For example, if you’ve taken out a $2,000 loan, and you’re interest rate is 800%, you’ll be paying nothing but interest for years. This debt keeps compounding as well, because its likely you can only pay the minimum. If you truly want to get out of debt, stay away from these types of loans.
You’ll Always Be Looking Over Your Shoulder
If you are only making the minimum payments, or if you can’t make payments at all, it’s only a matter of time before the illegal lender starts making moves to “get their money”. The best thing you can do if you’ve borrowed from a loan shark, is to report them to the proper authorities right away. Doing so will move you and your family out of harms way, and also keep other family’s from falling into the same trap.
So there you have it. 4 reasons to stay away from illegal loan sharks. What are some other reasons it’s a good idea to stay away from such unscrupulous lenders?