Loan sharks prey on people who are down on their luck and offer them quick cash in return for hefty interest rates. Unfortunately, many people take out loans from these shady lenders because they don’t have enough saved up to get by until payday. The good news is that there are ways to protect yourself against loan sharks – here are five tips you can use.

What is a Loan Shark?

A loan shark is a person or organization that offers loans at extremely high-interest rates. Loan sharks are often found in disadvantaged communities where money can be tight. They are often called upon by people who can’t get loans through traditional banks. Loan sharks make their money on the high-interest rates they charge for their cash. .

1. Don’t Bother With Loan Sharks

If you have a good job, save up money from every paycheck until you have enough to cover your expenses until the next payday. If you can manage that, then there’s no reason to turn to loan sharks for help. Remember: they want your money and will do anything they need to do to get it. Don’t waste your time .

2. Ask Your Friends for Money

If you have good friends who are willing to loan you money until payday, that’s a much better option than getting cash from a loan shark. Interest rates may be high with your friend, but you’ll be able to negotiate something fairly, and they’re not going to try to extort or intimidate you into paying back more than what you owe.

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3. Be Honest About Your Situation

If you take out a loan from a legitimate licensed lender, there’s no reason to be dishonest about your situation or income. In fact, if you are upfront and honest about what you make, the bank may offer you better rates on your loan. If you are more than likely to default on the loan, consider other options. .

4. Seek Out Other Options

If you need quick cash, there are other options out there that won’t cost you an arm and a leg in interest rates. Look for local credit unions or banks in the area that might be able to offer you lower interest rates on your loan. Sometimes  smaller institutions are a better option than the big banks, but it’s worth checking into both and evaluating your options.  Make sure to do your research for fair interest rates and terms that you are comfortable with. A good option could be a  legitimate loan provider such as  Rapid Loans.

5. Ask For Help

If you are having financial problems, don’t be afraid to ask for help. There are plenty of free resources available to help people manage their money better without resorting to taking out loans or using cash advances. If you are overwhelmed, call your bank or credit union to talk about your options and see what they can offer you regarding emergency loans.

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In conclusion, loan sharks are a scary proposition. They prey on the people who can’t get loans from legitimate lenders and offer them quick cash to make a profit. If you avoid going to these lenders, there’s no reason for you to worry about being a victim of their schemes or intimidation tactics.

About the Author:

Ray is a sought after thought leader and an expert in financial and money management. He has been published and featured in over 50 leading sites and aims to contribute articles to help novice financial planners. One of his goals is to impart his knowledge in finance to educate and help ordinary people create and achieve their financial goals

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