What Is A Loan Shark?
A loan shark is an unlicensed moneylender who charges exorbitant interest rates and fees on loans.
Loan sharks often operate outside of the law, and their activities can be illegal. This makes it very difficult for borrowers to get help if they are being harassed or cheated by a loan shark.
Loan sharks typically target people who are in desperate financial situations and who may not be able to get a loan from a traditional lender.
They may offer loans with no credit check or collateral, which can seem like a lifeline to someone who is struggling financially.
However, these loans come with extremely high interest rates and fees, which can make them impossible to repay.
If you’re considering taking out a loan from a loan shark, it’s important to be aware of the risks.
Loan Shark vs. Payday Lender
It’s important to distinguish between loan sharks and payday lenders. Although both lend money at high interest rates, payday lenders are legal in most states.
Loan sharks, on the other hand, are not licensed and their activities may be illegal.
If you’re considering taking out a loan from a payday lender, be sure to research the lender thoroughly before borrowing.
The Risks of Borrowing from a Loan Shark
There are several risks associated with borrowing from a loan shark.
Exorbitant interest rates
First, loan sharks typically charge extremely high interest rates, which can make it difficult or even impossible to repay the loan.
Second, because they are not regulated by any government agency, loan sharks are not bound by any laws or regulations.
This means that they can charge whatever interest rates they want and can use aggressive tactics to collect payments.
Third, some loan sharks may resort to illegal activities in order to get their money back. This could include harassment, threats, or even violence.
What are Loan Sharks? (Beware!)