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Loan Sharks, RUN!!
Transcript of Loan Sharks, RUN!!
If they look sketchy..
"most loan shark transactions are amicably conducted with both parties being satisfied"
Examples of Loan Sharks
Why would people use one?
How do I identify one?
The person's credit rating may be too low to borrow from a reputable lender such as bank.
They need only a small amount of money for a short period of time, hence payday loans and cash advance places.
They need a ridiculous amount in a short period of time.
Some more information for you:
They tend to target low income families and often do not question what the money is for or do any type of background check on your credibility to pay it back.
More common in countries other than the US or UK because of high crime, but this can still affect you too!
If they charge too much APR or if when calculating your repay cost it seems a little too much.
If they have little to no paperwork or only accept cash.
Increase the debt or payments without your permission.
Wednesday, November 19, 2014
Vol XCIII, No. 311
Not what you'd expect
What is a loan shark?
A shark? A mafia-leader?
"A person or entity that charges borrowers interest above an established legal rate. Depending on where a person lives, lenders typically cannot charge more than 60% interest per annum. A loan shark, then, would be someone who illegally charged interest over the state's legal limit, which could range up to, or even over, 100%." Investopedia
Often they resort to violence and threaten to hurt a person's reputation, but not always!
It is not just people, companies too! *gasp*
Robert Mayer, Loan Sharks, Interest-Rate Caps, and Deregulation, 69 Wash. & Lee L. Rev. 807 (2012), http://scholarlycommons.law.wlu.edu/wlulr/vol69/iss2/10
Loan Sharks, RUN!!
There are mafia leaders and the yamikinyu in Japan and we know to stay away from them, but...
They can also be payday or title loan places.
Cash Central https://www.cashcentral.com/Fees/Alabama
Example loan of $2,000 over a 24 month period with require the borrower to pay 24 monthly payments of $310. This sums to over $7400 total over just 2 years. That is 180% APR!!
Technically companies are required by law to charge under a certain amount of interest, but companies find a way.