What do you think the elderly, the minorities, the individuals earning low income and the individuals who have tarnished credit reputation have in common? If you think that they are all in dire need of money, then you’re right. If you also think that they’re all financially compromised, then you’re right again! But one more thing you may not think about them is the fact that they are all equally financially weak and are the easy preys of “Loan Sharks”. Then you’ll probably think, what are these Loan Sharks? Why do they prey on the financially weak? And am I also at risk of becoming their prey?
Loan sharks are individuals or group of individuals who are unlicensed moneylenders. They are those who operate money lending businesses without securing authorized copies of permit from official financial authorities. They unlawfully charge their borrowers with an interest far higher than the established legal rate imposed in the market.
01 Identifying Loan Sharks
Since loan sharks operate illegally, they have the freedom to dictate their interest rates over the amount of money borrowed from them. They can impose interest that can considerably be as high as 100%. Additional charges can also be incurred and fees are exorbitantly high. You can easily identify whether or not the loan provider you’re dealing with is a loan shark once it failed to have any accreditation coming from a legitimate financial authority stating that this loan provider can legally lend money to borrowers. Aside from that, you’ll find loan application a bit hard particularly in filling out applications and other paperworks since the contents are poorly written due to absence of review of a competent attorney. And worst, in maneuvering their debt collection system, they are more likely to engage with intimidation tactics just to make sure you’ll pay them back.
02 The risks in dealing with loan sharks
Because they are not legit means they can freely cater their own rules in putting conditions against your loans. One solid example is on paying late fees. Similar to the traditional lending institutions, loan sharks also charge late payment fees but in amount not within the acceptable range observed by legal mainstream financial institutions. In terms of payment collection, licensed moneylenders will notify the borrower through mails or phone calls to warn him about his dues, whereas in loan sharks, they will engage with harassments and other coercive measures once the borrower get behind with his payments. They more often than not practice abusive methods that eventually lead to frightening and threat of harms to the borrowers.
03 What you should do to avoid them
Simple – don’t borrow money from them no matter how desperate you are of it. Make sure that before you get a loan from any moneylender, you must ascertain whether or not they are legitimate and they possess a valid license giving them the authority to operate their lending business. You can try a payday loan, instead. It might be another answer to your urgent debt call. It may, at some point, encompass high interest rate and short duration for repayment, but it ensures you that you are dealing with the right financial source and that you’ll surely not to face any potential harassment in case you have difficulty in repaying. But if by chance, you are engaged with a loan shark, keep it cool. Don’t panic. In any possible subtle ways, secure a record or documentation of any threat or harassment these loan sharks have done to you. Then file a police report together with your secured evidences against these illegal moneylenders for the necessary legal actions to counter their wrongdoings.
It is always important to bear in mind that even in the toughest financial desperation; one should never deal with unlicensed moneylenders. It will never help us with our financial trouble; instead, they will just make our lives more miserable. Don’t become another victim of these terrible loan sharks!
