Loan sharks are moneylenders who lure desperate individuals into borrowing money at extremely high interest rates. Borrowing money from them should be a big no even for just a short-term loan.
The dark side of loan sharks
The loan sharks try to be friendly to lure borrowers to fall into a trap. They usually:
- Provide almost no paper work, and may take items as collateral such as passport, credit cards and driver’s licenses.
- Decline to provide info regarding rate of interest, loan balances
- Increase debt and interest rates without discussing with the borrower
- Charge extremely high interests making it harder to pay
- Pressure or even threaten borrowers until they borrow more money to repay another debt.
Check legitimacy of the lender
The Office of Fair Trading’s Consumer Credit Register has a list of licensed lenders, lenders with revoked licences, new applicants and lenders with suspended licences. Use the list to know if you should borrow from a particular lender or not.
Loan sharks are not above the law
Loan sharks do not have a right to recover any debt they claim because the loan is illegal in the first place. In fact, loan sharking is punishable as a criminal offence. Harassment, intimidation, threats and violence are signs of loan sharking.
Give information about a loan shark
You may give information about a suspected loan shark at the Gov.uk website.
Other loan options aside loan sharks
When you are in need of money but have low income, poor credit rating; there are still many available legit lenders. You just need to really look and ask around.
- Credit unions
- Help from the government
Aside from the government, there are so many other organisations, which can offer help.
In short, do not turn to a loan shark just because you cannot loan some money elsewhere. They may seem to be pleasant and affable at the outset but borrowing from loan sharks is not desirable anyway.