This blog post discusses the different types of loan sharks you may encounter and how to identify whether you are dealing with a loan shark or not.
From predatory lending to loan sharking, this article helps you get an idea on what to watch out for when negotiating a loan with someone.
As the title of this article suggests there are a few ways a loan shark can come into your life, from someone you know to an individual outside of your circle. The type of loan shark you may encounter depends on what type of business they run and how their business works.
There are a few different types of loan sharks: those who work for themselves and those who work as part of a network. Below is insight on each type and how to protect yourself against them.
Before I get into the types of loan sharks, first let me describe how a loan shark operates. They only make loans to people who can repay them but can’t get credit through a bank.
The general strategy is to offer very low interest rates and high interest rates on late payments. Then if you are unable to pay them back, they will increase the monthly payment substantially. A loan shark doesn’t really care about the quality of the person they are lending money to as long as they are
What is a Loan Shark?
Loan sharks are people who prey on the vulnerable through loans that are impossible to repay.
They charge excessively high interest rates and impose harsh terms like repossession of your home or car if you do not pay back the loan
. A loan shark will charge interest rates of more than 20 percent per year and if you can not pay off the loan before the specified term then they will repossess your home or car.
How do they operate?
Most people are unaware that a lot of the loans lenders offer have hidden fees and charges that can be very high.
They may even charge extra for each day you keep the car or property which means that you could end up paying thousands of dollars in fees, which is why it is so important to read the terms and conditions of any loan that you are considering.
All of this can be avoided by reading the actual contract carefully. If you can get a loan from a reputable bank then for almost all purposes, you will not have to worry about hidden fees or extortionate interest rates.
They are only interested in helping you find the best mortgage deal possible and they will do everything in their power to make sure that you get clear and simple terms. How do I know
Types of Loans
Loans are a very important aspect of our financial lives. They provide money to finance things like homes, cars and education. However, borrowing money does have a downside. It can be difficult to determine if you are negotiating with a loan shark or not
. One way to determine this is by the interest rates that are being charged on the loans. If the interest rates seem high, then it is possible that you are dealing with loan sharks who charge high interest rates in order to make more profits. 2. Do you have a Government license?
Many people think that if they are doing business in the UK then they are protected from loan sharks.
This is not the case. UK law states that no one has special protection from loan sharks in this country and even if you have a license to be an entrepreneur, the same rules apply here as well.
Loan shark operating outside of government regulations is a crime and those who deal with them should be aware of this before dealing with them or
How to Negotiate with a Loan Shark
There are a few ways to know if you’re negotiating with a loan shark or not. Some signs that can indicate that you’re negotiating with a loan shark include high interest rates, threats of violence, and delayed repayment dates.
If the person seems more interested in your personal information than getting a fair deal, they’re probably trying to scam you.
“Usually don’t let them talk to you first,” said Michael Daniels, a spokesman for the Better Business Bureau of Southern Nevada. “They’ll try to get you to share personal information with them. Don’t give out your bank account number.”
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Negotiating is one of the best ways to get a great deal, so it’s important to understand if you are negotiating with a loan shark or not. The dictionary defines loan shark as “a person who lends money at exorbitant rates of interest and then collects the debt by force, violence, or other illegal methods.”
For example, if you were negotiating for a new car and wanted to pay $200 monthly in installments, that would cost roughly $2,000 over the course of 5 years. A loan shark would ask for twice that amount: $4,000. This is a visual representation of how much more they are going to charge you if they don’t take you to court. Here is the same example with a loan shark:
The Total Amount of Interest You Will Pay Over the Life of this Loan (in this case, 5 years @ $200 per month)
$10,000 ($200 monthly payments x 5 years)
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