Borrowing money from loan sharks is not a good idea. Loan sharks are illegal and they will charge high-interest rates and sometimes it becomes impossible to pay their debt. There are no legal loan sharks available so it’s out of the question how you can find a genuine loan shark. Moreover, many financial experts said that taking a loan from moneylenders will make your situation even worse than what they are now. So, stop looking for a legitimate loan shark and start looking for other solutions.
- If you have a poor credit score, then you will find it very difficult to borrow money from reputed financial organizations or banks
- Loan sharks are unlawful moneylenders and it is very difficult to find a legitimate loan shark
- From loan sharks, you will be able to get a loan quite easily but you have to pay a very high-interest rate
- If you get behind with your repayments, then there are chances you might be harassed or threatened by the loan shark
What Is A Loan Shark?
Loan sharks are illegal money lenders who will give you a loan without providing you any paperwork. They will give you a loan with a high-interest rate and if you are not able to pay the entire loan in time then they will use threats and violence to get back their loan. Usually, a loan shark targets families who have low-income backgrounds or are going through some severe financial crisis. First, they behave nicely and give loans at a very high rate. But if the families don’t keep up their repayments then the loan shark starts to behave aggressively. They will do anything to get back their loaned money. Therefore, borrowing money from a loan shark is attached with many risks like –
1. You will receive a loan with extremely awful terms
2. You have to pay far more interest than borrowing money from a legal financial institute
3. There are chances you might be harassed or threatened if you get behind with your repayments
4. You might be forced to take more loans from them to reimburse one debt with another
How To Find A Loan Shark Who Is Legitimate?
I think you have already understood that a loan shark is not legitimate and our advice, you should stop looking for a legitimate loan shark and start looking for a legal and government-approved financial organization to borrow money. Legitimate loan sharks do not exist at all and every loan shark is illegal that’s the end of the story. You should understand that no matter how bad your financial condition is or your credit score is; you will always find legal loan companies who are willing to give you a loan with a low-interest rate. This is the best option instead of you searching for a loan shark. You can contact the Financial Conduct Authority (FCA) because the FCA licensed moneylenders are the safest and legitimate choice when it comes to borrowing money. The FCA keeps the list of all the certified lenders so if you contact them then you can easily find a legal money lender company. You can verify a moneylender on the FCA Financial Services Register and see if the lender is accredited or not.
How Loan Sharks Work
A loan shark can be an individual money lender or someone who works with an expert organization and offers loans at high financing costs. You can easily find a loan shark on the web, or through different local organizations and personal connections as well as in under-banked neighborhoods. Loan sharks don’t ask for individual verifications or credit reports. They will lend you any amount of money you want but with far over any controlled rate. For example, if a loan shark gives you $10,000 then you might have to pay $20,000 as reimbursed within 3 months. Moreover, if you are not able to pay the money in time then they might use savagery as a method to collect the reimbursement. Therefore, it is ideal to look for different other options if you really need to borrow money.
Advantages And Disadvantages Of Loan Sharks
|1||Easy to get a loan||The installment cycles of loan sharks are mystifying|
|2||You can borrow any amount of money||It’s hard for the borrower to precisely figure the aggregate sum of the loan|
|3||There is no need for individual assessment or credit score||You have to pay a much higher interest rate for loan sharks|
|4||There are no steps for the process flow of the loan||Sometimes it is hard to pay the loan and the borrower might be harassed by the loan shark|
|5||You can get a loan anywhere in the country||You won’t be able to take any legal action because loan sharks don’t operate within the boundaries of government agencies|
|6||There is no minimum balance for borrowing money, you can borrow as little as $1000||The loan you take from loan sharks are not reported to credit rating agencies|
|7||You don’t have to submit any documents||Taking loans from loan sharks won’t increase your credit score|
How Do You Understand If A Loan Is Illegal?
If someone offers you an unrealistic credit/loan then you can take it as a loan shark. Usually, loan sharks target people who need urgent financial help and offer them a loan without credit or salary confirmation. This is a clear indication that the loan is not a legit one and the possibilities are it’s a loan shark. Here are some characteristics of an illegal loan and if your lender does either any of the following then you will know that the loan is not legit –
1. The moneylender is not interested in your installment history
2. The person is not a resident of your state
3. The moneylender asks for a prepaid credit card
4. The person ignores your low credit score
5. The website of the company is not secure or don’t look legit
6. The lender has no physical location and/or office
7. The lender forces you to make the decision as quickly as possible
8. The person guarantees that your loan will be approved despite your low credit score
How To Spot A Legitimate Loan Company?
There are some characteristics of a legitimate loan company that will help you easily find a valid financial company from where you can borrow money risk-free. Let’s check them out!
1. Check the contact information of the individual or company like the telephone number, email address, physical location, etc.
2. Check the user review of the company on Google, Yelp, etc. and it will help you understand the reputation of the company
3. Contact the Better Business Bureau to see whether a bank is reliable or not to take a loan
4. Check and see if the moneylender is enlisted with state organizations or not; you can contact your state’s lawyer general to find the information
FAQs About The Loan Shark
1. What Happens If You Don’t Pay Back A Loan Shark?
There is no way you can avoid paying the loan shark. If you borrow money from a loan shark then you have to pay the full money. If you miss a payment or don’t able to pay the full loan then loan sharks might frighten you by misbehaving with you. They might come to your house and threaten you to pay the loan.
2. What To Do If Someone Made You Borrow From A Loan Shark?
If someone made you borrow from a loan shark then there is nothing to worry about. In this type of situation, you are under no legal obligation to repay the debt of the loan shark. If you face this type of situation then you should immediately contact your local Trading Standards office. They will help you deal with the loan shark.
3. Is It A Crime Not To Repay A Loan Shark?
Well, the answer to this question depends on whether the lender is licensed by the FCA or not. If the lender is not licensed by the FCA then it won’t be a crime not to repay the loan shark. Moreover, the loan sharks have no legal right to recover the debt. This is why loan sharks sometimes frighten the people to recover the loan.
4. What To Do If You Are Being Harassed By A Loan Shark?
If you are being harassed by any lender whether it is licensed or unlicensed like a loan shark then you should immediately contact your local Trading Standards office or the law and enforcement office. They will handle the matter for you.
5. What Are The Alternative Options For A Loan Shark?
There are many legit alternatives available for loan sharks. You can borrow money from licensed credit providers, credit unions, or various government benefits. The credit union will be the best option because they provide loans at a low-interest rate and they also provide financial advice and assistance to people who have minimum knowledge about how to get a loan.
Last Updated on October 22, 2022 by Magalie D.
Magalie D. is a Diploma holder in Public Administration & Management from McGill University of Canada. She shares management tips here in MGTBlog when she has nothing to do and gets some free time after working in a multinational company at Toronto.