Need cash fast? Want to make sure you get the money you need from a legitimate business instead of a “loan shark?” Read on to learn more about loan sharks, how to avoid them, and how to get the cash you need without turning to a shady lender.
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What Is A “Loan Shark?” Defining The Term
The term “loan shark” may make you think of Hollywood movies, where a back-alley moneylender gives out thousands of dollars – and pays thugs to take back the money they’re owed if they’re not paid back in time.
In reality, things are a little less like they are in show business. Today, the term “loan shark” is mostly used to refer to moneylenders who operate without being properly licensed or regulated by the relevant financial authorities.
Loan sharks often engage in shady and suspicious activities. For example, a loan shark may refuse to give you paperwork or documents related to your loan, require you to leave items until your debt is paid, such as your mobile phone or driver’s license, and continually add more interest to your loan – so that the debt never goes down.
And while this is rare, in some circumstances, a loan shark could use intimidation or threats of violence to try to make you pay.
Tips For Avoiding Loan Sharks
So, how can you avoid loan sharks? It’s actually quite easy. Here are a few steps you can take to
- Work with vetted, well-known lenders – Don’t ever work with any lender who does not operate out of a proper office, or cannot prove that they are licensed and operating legally. Choose reputable lenders like banks, credit unions, or well-known title loan agencies.
- Contact regulators about a business’s license or legitimacy – If you think that a lender may be doing business illegally or may not be properly licensed, you can contact local authorities that offer business licenses and regulate lending in your area, and find out if they are legitimate or illegitimate.
- Always get written documentation about your loan – Written loan terms protect both you and your lender if there are any conflicts or problems with the loan, and ensure that the loan is legally enforceable. If your lender does not immediately provide you with written loan terms and a loan contract, do not work with them.
- Never leave collateral – A legitimate lender will never ask for collateral such as your driver’s license, phone, jewelry, passport, or any other such possessions. This is a sure sign of illicit activity.
Know How To Recognize And Avoid Loan Sharks With This Guide!
Hopefully, you’ve learned a little bit more about how to recognize illegitimate lenders and avoid them. Make sure that you only do business with licensed, regulated lenders, and you’ll be able to protect your finances and ensure a better future, both for yourself and your family.