Americans are strapped for cash.
For instance, 55 million of us currently live with no savings set aside for a rainy day.
That’s a scary statistic. What can you do if emergency strikes or your pay cheque just doesn’t stretch far enough this month?
With no cash to draw from and a poor credit score to our name, it’s tempting to apply for a short term, high-interest loans to cover costs and get cash quickly.
It’s a dangerous business though, and caution is advisable! After all, there are loan sharks about. These are money-lending predators that will take advantage of your situation.
But what do they look like, and how can you identify their dupes?
Keep reading to find out.
What is a Loan Shark?
You need to know what a loan shark is before you can spot one.
A loan shark is a money lender. That’s their basic function. However, they don’t have your interests in mind.
They’ve earned their moniker for a reason: loan sharks are predatory, aggressive lenders who charge enormous interest rates on any loan.
Before you know it you can end up in substantial debt by their hand.
They may operate legally, or illegally. But the premise remains the same. They exist to take advantage of your financial shortfall.
You need the money and they have it. And they’ll make you pay through the nose to pay it back.
Now, these guys obviously don’t call themselves loan sharks. It’s your job to know how to spot them. That’s next.
How to Identify a Loan Shark
You need your wits about you when a loan shark’s around. Here’s how to spot a shark.
You Get the Money Easily
There’s a reason that a bank might not lend you money.
Simply, based on your credit history, they have a reasonable idea that you’ll struggle to pay the money back. That’s sensible banking.
Loan sharks suffer no such sensibility. They actively want you to take their money. They will make it as easy as possible.
No questions, no credit check, no nothing. Just the money you want in your account.
The Interest Rate is Unknown
Loan sharks may not tell you the interest rate on the loan.
That’s a sure-fire warning sign. Never accept money if you don’t know how much you’re paying back.
Likewise, sharks are known to ramp up the interest rates, even if they quote you a rate at the outset. For no good reason (other than to get more of your money) they’ll add a few digits to your interest rate.
They’re Bullying, Persuasive, and Manipulative
Loan sharks have a habit of being remarkably persuasive.
They’re the slick, handsome salesperson who’ll charm your socks off. They’ll convince you of the value in the loan. They’ll persuade you that you need it and that it makes total sense.
They’ll push you into a decision you might not want to make.
Be wary of someone forcing money down your throat. Chances are it isn’t in your interest!
Time to Wrap Up
There you have it: how to identify a loan shark and what they are.
Times are tough, and money is tight for the average American. Millions of people live their lives without savings for a rainy day. It’s prime loan shark territory.
Think twice before taking money when it seems too good to be true. Keep the information above in mind, and always look for alternative solutions to your financial constraints.
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