The danger of dealing with loan sharks!!!!
Loan sharks are defined as unlicensed moneylenders who charge very high interest rates. They come in the form of “legal” lenders that adhere to the rules – but, they make false promises by making you sign seemingly legitimate contracts that in the end sometimes use threats and violence to frighten people who can’t pay back their loan.
How do they operate?
- Refuse to give information, such as the interest rate or how much you owe
- Take items as security, such as passports, bank cards or driving licences
- Increase the debt or add additional charges at any time
- get a loan on very bad terms
- pay a huge rate of interest
- be harassed if you get behind with your repayments
- be pressured into borrowing more from them to repay one debt with another
How to deal with loan sharks
It’s never too late to get out of it, if already you have already borrowed money
then consult your local trading standards, they will help you deal with them. Remember you are under no legal obligation to repay the debt.
What to do if you’re being harassed?
Any lender – licensed or unlicensed – who harasses you is breaking the law.
You should report any loan shark to your local your local Trading Standards office and to the police if the loan shark threatens you or uses violence.
Alternatives to loan sharks
- Consolidate your debt this will give you a better interest rate and improve your cash flow.
- Credit cards. Despite the fact that using credit cards can become habit, there are benefits of this when compared to a loan shark:
- Even if the interest rate is high, it is not likely to be as high as what a loan shark would charge
- You are dealing with a reputable company
- You can make the minimum monthly payment without any concerns of retaliation or your debt growing without your permission