A loan shark can be a person or a body that offers loans at extremely high rates of interest. Loan Sharks refer to illegal activity in terms of money activities. Loan sharks sometimes impose methods like threats, blackmails, or violence in the process of repayment.
The Loan sharks often work from home and impose high-interest rates. They won’t be providing you with much paperwork in order to confirm the policies they have agreed with you upon.
As mentioned above the loan sharks often take illegal actions in order to make money, and in extreme cases, they have been known to force the ones with dues into professions like drug dealings and prostitution.
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In such cases, people are requested to contact the police right away, if a Loan shark imposes any of the illegal methods for the repayment.
- Remember that a Loan Shark may do something like mentioned below:
- They may offer you less or no paperwork, for example, a license, legal agreement, or any record of payment.
- They may increase the debt amount by adding amounts to it without your consent.
- They may also refuse to provide you with the information in terms of the rate of interest or how much you still owe them.
- They confiscate your valuable documents like passports, bank cards, etc.
- Also, they may not allow settling your debt just like that.
Why Loan Sharks are considered bad?
Remember Loan Shark will start out so damn friendly and if you keep up your repayment, they will happily stay that way. But the bitter fact is, even if you do, any money you borrow from them will come to you at a very high price( High rate of interest).
- There are a number of risks attached while borrowing from a loan shark that is:
- You will pay a high rate of interest than any legal loan borrowing. For example, if you borrowed $500 then you will end up repaying $8,000.
- There are high chances of you getting harassed if you get behind on your repayments.
- You will also be pressurized for repayments more than the amount you borrowed.
The Law and the Loan Shark
However, some loan sharks may impose some illegal methods in order to take the money, but they are not beyond any law. Remember any lender whether he/she is licensed or non-licensed who harasses you is breaking the law. The loan sharks are also known for threatening you by saying that you will be prosecuted and will even be sent to prison due to non-payment. So, in that case, do not forget that this cannot happen in any case. A loan shark has no legal right to recover the debt from you.