Loan sharks worry a lot of people, and while there may be good reason, popular culture and mainstream media have also set a lot of people up for an expectation that doesn’t really exist. High interest rate loan sharks are out there, all around the world, but they aren’t what you are probably thinking of—they’re just your run-of-the-mill predatory lenders who are trying to take advantage of desperate people who find themselves in a tight financial spot.
Whether it’s a Chinese loan shark or one that’s based in the U.S., their practices are suspect at best and need to be on your radar to be avoided at all costs. It’s funny how the name can change the entire perception of a thing—payday lenders sound like they’re helpful, while loan sharks sound like they’re out to get you—and yet they both fall under the same umbrella: predatory lenders.
How to Avoid Loan Sharks
You can generally avoid most of the worst loan sharks by paying attention when you’re looking for financing assistance. You will typically end up paying a fortune in interest, sometimes up to 200 or 300 percent of what you borrowed in some cases. Companies may also be more likely to harass or threaten you if you don’t pay on time or pressure you into taking out a bigger loan or extending yours with additional fees to help cover the costs. All of this is done knowing that you will continue in a spiral of debt that you can’t repay.
So, how can you deal with a loan shark? Just do your homework. Pay attention and watch out for companies that refuse to spell out the terms of the loan before you agree, or who don’t even require a lot of paperwork to get you started. If they take weird items for security, such as a passport or driver’s license, it might be suspect. They may also refuse some payments unless you pay in full, so that’s a big thing to watch for, also.
You can also check with the local authorities to ensure that lenders are legitimate. Look up their business information online and check out professional and user reviews. Get as much information as you can about a lender before you agree to work with them. That way, you’ll be able to know they’re worthy of your trust before you make any agreements or put anything in writing.
Loan Sharks are Everywhere
It’s not just Chinese loan sharks or the ones that are here in the U.S.– it’s the fact that they’re everywhere. Whether you run into a loan shark in China or a loan shark on the dark web, you need to make sure that you’re not falling for their lending practices. Even if you think it’s your only option to get the money that you need, you probably have more alternatives than you think if you take a little time to do some searching.
Watch for people who are just trying to get your signature or who claim to have instant funds or no credit check loans—these might be viable lending options, but they could also be a sign of loan sharks lurking and waiting to take advantage of you. In either case, you need to know what you are getting into.
Remember that you’re not necessarily limited in your options as much as you think when it comes to financing. If you feel like loan sharks are the only option, stop and look at things like bad credit loans, car title loans and bad credit installment loans, or even consider asking friends and family for help. Whatever you do, don’t settle for predatory lending if you can help it.