Guidelines on How to Spot Loan Sharks
You may be having a business idea that is ready to be implemented. You may also need to see a loan shark to borrow some cash for your personal reasons. Loan sharks are not legally licensed to operate and they are, therefore, not regulated by the authorities. The transactions involving loan sharks are often simple and fast, but the interest rates are usually very high and unregulated. In fact, you can get as much money as you want within a very short time. You can only know that you are dealing with loan sharks if you experience the following things.
Often, loan sharks have little or no paperwork involved in their activities, and that should be an alarm to you. Loan sharks will always avoid notifying you about their interest terms until you take the loan. This is due to the fact that, on noticing the high interest rates, borrowers will opt to look for alternative sources of money. Since the interests accumulate very fast, borrowers are sometimes compelled to take more loans to pay the former loans. In the long run, you will discover that the amount of money you pay as interest is higher than what you borrowed from the lenders. These companies are used to inflicting fear into their borrowers to ensure that all of them pay their debts, by use of threats like lawsuits and other legal measures. You can, however, spot a loan shark and avoid them easily if you are keen enough on the various money lenders.
Another thing to look at, is the lenders’ behavior and requirements for getting a loan. This company will ask you to provide them with your documents like passports and other licenses which they will in turn use to trap you in debt. When they notice that you are too deep in debt, they will not allow you to make full payments of your debt. These loan sharks will be charging you incidental fees which you will be paying to them for as long as they want. It is important that you avoid loan sharks as much as you can.
Finally, even if you feel so pressed to take a loan, there are always better lenders than loan sharks. You can seek for help from financial institutions like banks which are genuine, provided your loan history is good, and the amount of money you are requesting for is within the limit. You also have an option of getting cash advance from credit cards because they charge lower interest rates than loan sharks. There are many websites online where you can learn more about other legit money lenders for you to transact with. By visiting these sites, you will get more info about lending companies and their terms of lending.