Although a lot of people don’t realize it, loan sharks really do exist. They’re hardly anything like what you see in the movies, but they’re definitely something that should be avoided at all costs. A “loan shark” could be anyone that uses predatory lending practices—that is, they use poor tactics to prey on people who may be more desperate for financial assistance and less likely to investigate anything out of the ordinary as a result.
Therefore, the first thing that you can do to avoid loan sharks for good is to make sure that you know what you’re getting into. Education is your biggest friend in this situation—don’t settle for just any loan and even when you think that you’re in a financial pinch, make sure that you shop around and compare all of your options.
Also, make sure that it doesn’t sound too good to be true. Too often, these companies make outlandish claims to draw people in, only to deliver the exact opposite (or nothing at all). Don’t let yourself become a victim just because things sound like they’re so good that you can’t pass them up. Most of the time, that’s not a good sign.
Why Do Loan Sharks Exist?
There are a lot of people who wonder why loan sharks exist in the first place if there is regulation in the financial industry. The fact of the matter is that several of these less-than-reputable lenders exist within every letter of the law, operating with total legality in every way. They simply charge higher interest rates, more fees, or have other ways to make people pay for the money they need.
Loan sharks exist because there will always be people who are desperate for money. Therefore, there will always be people who are waiting to prey on them and take advantage of them when they are in a situation that makes it easy to do so. These people aren’t hiding in dark alleys or sitting in a smoky silhouette behind a desk—they’re out there, everywhere, and they’re not always easy to spot.
There have been crackdowns in an attempt to get rid of loan sharks for good, but as long as there are loopholes and exclusions, as well as desperate consumers, there will always be predatory lenders waiting in the wings.
Where to Find Loan Sharks
As mentioned, loan sharks are everywhere. They aren’t always lenders that you want to find, though. Finding a loan shark could be a bad idea for several reasons. If you are really in need of money and don’t have a lot of options, you will want to take a step back and consider what you can do besides taking on one of these predatory loans that may or may not even help you in the ways that you need.
Private loan sharks and others are out there, and they’re waiting for people who are in a pinch. Fortunately, the real loan sharks aren’t anything like what you see in the movies. However, no matter how you spin the loan sharks definition, they’re not good people to connect with if you can help it.
Instead, choose more reputable lenders and find those who are willing to work with you even if you have less than stellar credit. Consider taking the time to improve your finances a bit or joining a credit union, where you can often get better lending options and rates just for being a member. Whatever you do, don’t settle for a scam of a loan when you find yourself in a financial situation that’s dire. You do have other options, so long as you take the time to explore them.