Not all loan sharks operate the way you might think. They do not necessarily operate out of smoky backrooms, dressed like gangsters. Some loan sharking businesses appear so above board that people are shocked to discover that they are victims of these predators.
Once they have a hold on you, loan sharks are reluctant to let go. After all, you are a good source of income to them, provided you keep up to date with payments.
What are your options if you owe a loan shark money?
Settle outstanding debt
Loan sharks charge such exorbitant interest rates that you could end up paying double the amount borrowed in a matter of months. The payments become crippling, and loan sharks rely on that. They want you to go back and tell them you cannot pay because then they offer to lend you more money on which they charge additional interest.
If you are in hock to a loan shark, look for payday loans online to borrow enough to settle your debt. Payday lenders are regulated by authorities and do not charge outlandish interest rates on loans.
For a database of registered lenders and a chance to evaluate your options, Personal Money Network provides all the relevant information. The easiest way to distance yourself from a loan shark is to pay the outstanding balance and never go near them again.
Research your lender
Because some lenders look entirely legitimate, you might not even be aware that you are in the clutches of a loan shark. If you are about to borrow money from a reputable-looking company, research it first. Find out if it is a registered lender regulated by mandatory legal frameworks.
Some indicators that you might be dealing with a loan shark include a lack of formal documents for a loan agreement, with the lender wanting to rely on verbal agreements. They renege on them at some point, leaving you with no legal recourse.
Loan sharks also increase the interest rate and repayments with no notice and might take items like your passport or driver’s license as security on a loan. Such actions are illegal and should sound warning bells about the veracity of a lender.
Report to authorities
Loan sharking is an illegal, unregulated trade, and more people fall prey to these illicit operators than you might think. Very few report loan sharks to the police because they are convinced that they will also be in trouble for borrowing money illegally. Loan sharks rely on this, and if you mention going to the authorities, they will attempt to dissuade you by implying that you have also broken the law.
Unfortunately, loan sharks seldom operate independently as they form part of large, organized crime syndicates. Reporting them to the police can be scary as they will threaten retaliation.
This might make you think twice about going to the police. Nevertheless, loan sharks are perpetrating crimes and taking advantage of vulnerable people such as yourself who are desperate for money. For your sake as well as theirs, loan sharks should be put out of business.
Anonymous reporting
As loan sharks are inclined to resort to bullying tactics when lenders do not repay them, threats of violence are quite common. This can leave you worried about yourself and your loved ones, and it will seem easier to keep repaying impossibly high installments to keep the loan shark at a distance.
Look online for action groups that help people who have become trapped in a loan shark cycle debt. Experts offer you legal advice and could help with an anonymous report to authorities to get a loan shark’s operations shut down.