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You always dream of owning your own home, buying a car, or starting your own business. However, it will be difficult and costly to achieve those dreams without establishing and maintaining a solid credit history.
Without it, many Hispanics get help from a lender. When you are looking for money, you may have someone you know say, “I know this gentleman who lends money and doesn’t ask for papers.” This “money lender” person may be a friend of a friend. Even someone related to a family member or even in the neighborhood places where you make money transfers.
Different terms know these people and agencies in our countries: moneylender, shark, loan person. Whatever their name is, the truth is that there are several disadvantages of borrowing money from a loan shark: that is why we will see how to find a legitimate loan shark.
How to Find a Legitimate Loan Shark
Okay, the first thing you need to know about this is that you request something that doesn’t exist. Loan sharks are illegal. No matter if you live in the USA, India, or UK. All these lenders are illegal. They don’t have any legal support, and they can’t do anything against you if you report them to the police.
However, let’s discuss a little about why they are illegal:
- They do not have any legality because they commit the crime of usury (because of the interest rates they charge).
- The origin of the funds they use to lend money is from sources we do not know.
- They do not have any registration with the banking authorities.
- Do not ask you for documentation because they do not need to know anything about you only that you pay.
- Use intimidation as a way to collect.
- They make many misleading advertisements on social networks.
- The interest rates are very high.
For all these reasons, the best thing to do is look for other options that do not require so many papers but are legitimate before the law.
Loan Sharks Features
They charge weekly interest
What is the real cost of the loan? The lender will pay you interest per week, not per year. Remember that personal loans from banks and other financial institutions always use interest expressed per year. Let’s take a typical case:
The lender gives you $1,000, and you agree to pay 5% per week on that amount. 5% per week means you pay about 20% each month, and if we multiply that by the 12 months of the year, we have an annual interest rate of 260%!
IOUs are confusing
Putting the interest rate in weekly terms doesn’t sound that high. Typically, lenders’ interest is ten, twenty, or even thirty times the interest you would pay on a traditional loan.
The loans are difficult to repay; they are designed to be almost impossible to repay. Many people who have taken money from lenders end up losing more than they make.
Loan Sharks & law
Loan sharks function by lending you money that you must repay on a specific date, either in whole or installments. The same rules do not bind them as genuine lenders. There is no background check, no minimum income, and no need for a bank account. They also don’t seem to mind if you are unregistered. Some may need security, such as a credit card. A driver’s license or visa may be requested.
Loan sharks demand exorbitant interest rates in exchange for their services. Even payday loan companies pale in comparison. They also give higher sums than are legally allowed for such short periods. As a consequence, they leave excessive repayments and narrower cash margins.
Many loan sharks slap you with hefty penalties or boost the interest rate if you don’t pay back the loan. Others will abide by whatever promises you make.
As for the law, it all depends on the country you live in. A loan shark working in the UK is not the same as working in the USA. You can check that a loan shark is legitimate by consulting the published listings (if you live in the UK) of the Financial Conduct Authority (FCA).
Remember that even if this lender is legally constituted, he breaks the law if he threatens you. Don’t believe loan sharks who say you can go to jail if you don’t pay. The loans these people make are illegal and have no legal standing.
Reporting a Loan Shark
You can call the cops to report a loan shark, especially if they threaten you. Although there are no specific laws against loan sharks in countries like the USA, you can protect your integrity.
Alternatives to Loan Sharks
If you need money quickly but don’t have good credit, examine the following options before turning to a loan shark. Often, you may apply online. Among the possibilities are:
Alternative Payday Loans
Loans ranging from $200 to $1,000 are available at several federal credit unions. Borrowers with all sorts of credit should pay about 28% in interest.
Pay for your applications ahead of time. There are prepaid programs that enable you to receive the wage you earned before the change in pay. This is frequently done in exchange for a recommended contribution.
You may loan between $500 and $5,000 with this choice. The rate is usually between 100 and 300 percent. Lenders with weak credit or exceptional revenue levels will be able to use it.
You can obtain up to $500 in loans using this. For every $100 borrowed, you could expect to pay around $10 or $15. Of course, this depends on where you reside and whether or not they are authorized in your area.
Regional credit unions may help you get a loan. Focus on low lending with more flexible qualifying conditions at your financial firms. Instead of your SSN, some merely want your unique tax id. This may make it easier for illegal employees to receive financing.
10 Non-Loan-Shark Loans for Bad Credit
There are multiple options for bad credit. These types of loans are for starting new businesses. Many people require financial assistance and may seek these alternatives:
Credit unions are for groups of people who have something in common. Many times it is people who share the same residential area or co-workers. It’s always worth doing some research to see if you can join a credit union near you. They usually offer much lower interest rates. The best thing is that they may also offer financial advice.
This is another option that usually has high-interest rates. Please don’t rely on credit cards regularly for credit. They can be useful in an emergency. Credit cards are useful for obtaining short-term loans.
All overdraft interest is now calculated as a single annual interest rate. As a general rule, they range from 20 to 40% depending on the bank. It can be a good solution to your short-term cash flow problems. However, like credit cards, the amount you owe accumulates quickly. This is something real if you are not current on payments.
Many charities and funds offer grants. The idea is that these are non-refundable for people with financial difficulties. However, these types of loan payments need to be researched thoroughly.
A budget loan is an extra money added to your services. This is to help you pay for certain essential expenses. It can be anything, for example, paying for household items, rent, or maternity expenses.
Working with Online Lenders
Finding legitimate and reputable lenders will save you from most problems. You should research the lenders you are considering. In your search, you will be able to read both positive and negative reviews.
Remember that not everything shown on the Internet is true. There you are likely to read the opinions of employees or scammers. The safest way is to apply for a loan from a lender you have heard about from a reliable source.
However, before you apply, check with the US Consumer Financial Protection Bureau (CFPB). There they maintain a database of financial product complaints. You will post these complaints and any response from the lender online within 15 days. So any lender in this database should be up to date with their customers.
You can also hear about good lenders on websites and podcasts. The more sources you consult, the safer you will be when you apply for a loan.
Confirm if your lender is legitimate or not
Apply to reputable companies
To avoid problems, we always recommend that you ask for money from reputable companies through which you can be sure that you are not taking any risk. To begin with, make sure that they have all the quality certificates.
Read the contract carefully
To avoid unnecessary scares, check the financing conditions when you are looking for a loan. You should read the contract before signing it. You need to know that what is important is what you sign. Keep away promises and other terms that don’t appear in the document.
Take your time and don’t feel pressured by others. You need to understand all the details. And if there is anything you don’t know or have questions about, don’t hesitate to ask.
Watch out for interest rates.
One of the sections you need to look closely at is the interest you will be charged at the application time. You need to look at the loan’s interest rate and then compare it to other options. In this way, get the financing that interests us.
Let the authorities know about these loan sharks.
There are many contact lines to report a loan shark. Remember that you are not alone in this. The best option you have is to avoid lending money to these people. However, if you already owe money, look for contact numbers in your city. There are multiple options on the Internet to access loans.
The authorities will be available to help you. All you have to do is know the contacts in your city.
Report any further threats made by the loan shark.
These types of people like to threaten their customers when they notice suspected defaults. This type of person has no legal protection. Instead, you can report them for usury. Every country in the world has a legal framework that protects you from these people. Do not be intimidated and denounce in time.
Tips for Sealing with Loan Sharks
Here are some ideas for dealing with loan sharks. Watch out for these dangerous signs that may come up:
Reputable lenders don’t charge upfront fees. This is a type of scam often used by crooks. They will seek to convince you to pay a fee for processing their application.
There are legitimate loans that cost money to apply for, but they are usually large loans, such as B. Mortgages (you may need to pay for a credit check or appraisal). These fees are clearly stated, often in public relations documents. When it comes to a personal or auto loan, you should avoid upfront fees. If you end up paying a fee, you can be sure that they will still try to get a “finder’s fee.”
Advantages of Loan Sharks
You have easy access to cash to buy a product you want and need. It’s fast cash. Even you can invest money in training that will give you a boost in your career. If you are interested in a specialized course, a master’s degree, or want to learn English, loans offer you a finance solution.
It usually does not commit any specific asset, as the processing process is faster than a mortgage. You can agree on a repayment term that suits your financial situation. However, you should keep in mind that the longer the term, the more interest you will pay.
It is common for entities to offer better conditions, such as reducing the interest rate when deciding to take out other types of products. These links are not mandatory, so it will not be necessary if you do not pay to do so.
Frequently Asked Questions
Do loan sharks still exist?
Yes, and they come mostly in places where there is not much banking activity. They go into every neighborhood looking for customers. Remember that this type of lending is illegal. However, that doesn’t mean that you have no legal protection against any problems.
What happens if you don’t pay back a loan shark?
Nothing happens. However, many loan sharks like to threaten their lenders when they see that they will not pay them back.
Where do I find a loan shark?
You can find it on the Internet, on social media, or in some local advertisements. You can even ask your friends if they know of any that they can introduce you to.
Are loan sharks legal?
No. There is a register of loan sharks with some licenses only in the UK. In all other countries, this type of crime is considered usury.
Can loan sharks kill you?
There are tragic cases where the lender meets death. But that would not necessarily be your case. The important thing is to be able to detect the warning signs and violence. Call the police and avoid a bad time.
What are examples of famous loan sharks?
- Fiore Buccieri
- Frankie Breeze
- Vincent Dominic “Jimmy” Caci
- Frankie Cheech
- Nicholas Calabrese
- Nick Maranello
- Nicky Licata
- William Daddano Sr
Can you report a loan shark to the police?
Yes, you can report any situation with a loan shark. If you feel any threat, you can go to the authorities.
How do you solve loan shark problems?
The best thing to do is to avoid any loan with them. However, if they have already lent you the money, the best thing to do is honor what you agreed to beforehand. Not all loan sharks can be bad at all. Much will depend on the context you want to access the loan. It mostly depends on your particular situation.
Can you sue a loan shark?
If you live in the UK, you can sue a loan shark. However, if you live in the United States, you can sue for usury. This is the most common type of crime for which you can sue loan sharks. But they can not take you to the court.
What is another name for a loan shark?
You can find a loan shark by these other names:
- Gombeen man
- Payday lender
Is it illegal to borrow from a loan shark?
There is no legal framework to protect loan sharks. Therefore, it is illegal to access loans. They become an illegal lender.
Where do loan sharks get their money?
Sources of funding are difficult to verify. So you could be sure that the sources of funding come from illicit businesses. Some lenders may have their capital but make smaller loans.
What type of crime is loan sharking?
Usury is the type of crime in which it is classified under any law.
Where can I borrow money fast?
- Online lenders
- Payday lenders
- Cash advance from a credit card
- Family and friends
- 401(k) retirement account
When a person is faced with a financial emergency, they often have no choice but to take out a loan. Banks impose so many requirements that many people are left out of the system.
As a result, thousands of people are likely to end up seeking informal loans. The choice is wide and varied: from a trusted neighborhood store, from a neighbor who lends money and collects house-to-house, or from so-called financiers who advertise on posters on lampposts and on Internet ads. Some moneylenders take money to popular fairs to grant informal loans to entrepreneurs.
The main problem arises when the borrower of this loan terms falls behind in the payment of one of the installments and requests refinancing. The fees multiply, or the collection of this debt becomes threatening and violent.
For all this, remember that you can use credits for several purposes. You can get checks for short-term loans, and also have student loan forgiveness, or maybe use your credit check from money lenders to get a service at home, or maybe to travel or invest. Banks like Grameen Bank can be great financial partners.
I am Lavinia by name, and a financial expert with a degree in finance from the University of Chicago. In my blog, I help people to educate by making wise choices regarding personal investment, basic banking, credit and debit card, business education, real estate, insurance, expenditures, etc.