Desperate times call for desperate measures. When you are in a pickle and need money, your first inclination is to approach the bank for a loan.
However, when you find yourself in a tight spot with money, the chances of a loan being approved by the bank are quite slim. This leaves you no choice but to borrow money from another source, like loan sharks.
If you have a bad credit score, then it's highly unlikely that you will get a loan. Get your credit score first and see where you can improve.
Loan sharks are always out to catch desperate people in difficult circumstances. It’s important to be aware of these loan sharks and doesn’t fall prey to their sneaky tactics.
When you are in desperate need of money, you may be inclined to let your guard down and fall victim to these well-versed criminals to get by, not knowing the long-term ramifications.
What is a Loan Shark?
A loan shark is an illegal money lender that preys on people in desperate circumstances. At first, they always seem friendly but more often than not, the relationship resorts to violence, intimidation, and threatening behavior before long. One tell-tale sign of a loan shark is the lack of paperwork they provide regarding the lending arrangement.
Additionally, they are also known to charge extremely high rates of interest on the amount you borrow. Once you have borrowed money from them, they generally turn to intimidation to receive the repayments, which are often dramatically high due to their interest rates.
Since these loan sharks are not legally allowed to lend money, the law will not support them in trying to recover the debts you may owe them and as a result, use intimidation tactics and violence to ensure you pay them back.
How to Identify a Loan Shark
Most loan sharks tend to operate in a similar way since that is their business. So, it’s not too difficult to spot them when you are on the hunt for a quick loan. The first sign is that they offer you little to no paperwork for the transaction. They don’t supply you with a credit agreement, a lender’s license or any record of payments.
Another sign is sketchy communication when it comes to exact numbers like how much you still owe or even what your interest rate is. They may also not allow you to settle your debt in full at any point and take valuable items from you as security such as your passport, driver’s license or a bank card.
They are also identifiable when they increase your debt from not reason or add on additional fees without prior notice or permission. Lastly, if they start to get nasty and rely on intimidation tactics, start to threaten you and resort to violence, you know you’re dealing with a loan shark.
Check the Legitimacy of your Lender
Before borrowing money from any company, organization or person, it’s important to check if they are a register credit provider and have the correct license to be able to lend you money legally.
Most banks are registered credit providers and should be listed on the Register of Registrants the National Credit Regulator (NCR). You can check if a company or organization is legally registered if they have voluntarily canceled their registration, if the registration has lapsed or if their license has been revoked or canceled by the tribunal.
All this information is available online, so you can research the lender before committing to anything or borrowing any money. Never borrow money from someone who is not listed as having a current license.
Alternative Lending Options
If you only need to borrow a small amount of money for a short period of time rather opt for a legal and reputable lender that will accept your application. If you need to improve your credit score, you could apply for a credit card or store card with s very small spending limit that you use for small purchases and pay back in full every month.