It’s fair to assume that the vast majority of us will experience financial difficulties at least one point in our lives, and when you get into financial difficulties it’s often hard to get out of them. You need to be sure that you are choosing the best approach to your situation.
Unfortunately, many people do not do this and instead they choose the easiest option of lending from a loan shark. This might be the easiest way to obtain money in difficult times, but it is anything but the best option.
The Terrible Side of Lending
If you’re going through financial difficulties then you will find that many high-street lenders won’t be very willing to deal with you – to them, you are seen as a risk as you are less likely to make the repayments. This means that many people will turn to alternative options such as a going to a loan shark.
This is the easiest way for many people to obtain money in difficult times, but it is definitely not ideal. A loan shark will build a relationship with you on friendship and if you keep up with the repayments it might stay this way, but it will probably be the most expensive friendship you will ever have!
Failing to make the repayments could put your life at risk. Chances are that you will constantly be harassed for the money, whether you can make the repayments or not. However, the repayments are extremely difficult to make simply because the interest charged is ridiculously high.
How to Protect Yourself
In order to protect yourself, you should aware yourself on how a loan shark will operate compared to a standard high-street lender. Here are some things that you should look out for:
- Upon first meeting the loan shark, it will be a personal meeting. More often than not, there will be zero (or very little) paperwork involved.
- Loan sharks will also be vague about the terms of the loan i.e. repayment amount, interest rate.
- The loan shark might insist on keeping hold of “security” such as a driving license or passport.
- If you fail to make the repayment, the loan shark will almost always threaten you with physical violence, blackmail, or other types of threats.
If you are ever uncertain about whether you are dealing with a loan shark or not, just remember to check the Financial Conduct Authority (FCA) records. The FCA keep records of all the people and companies who have applied for a license or had a license suspended.
If you are struggling financially, you don’t always have to resort to a loan shark because there are often many decent alternatives. You might be able to borrow from a reputable moneylender, credit union or get help from your government. Also look at the incomings and outgoings of your monthly budget, you might be able to cut back on a few unnecessary expenses.