Spot a Loan Shark

How to Spot Loan Sharks And Find Legal Lenders

Lending companies are found almost everywhere. They have different offers depending on what type you need. Applying for a loan is risky and you would not want to be associated with a loan shark.

Loan sharks are someone who lends money to people and charges a very high rate of interest. There are factors to consider to avoid them but first you have to identify which one. Check the criteria listed below.

  • If the lending company’s interest rate is high compared to others, chances are it is one of the loan sharks. Remember, you’re looking for quick cash to fill out your financial emergencies not to create your own financial sinkhole.
  • Every time you apply, documents are needed. If the lender you are talking to does not require one, you better find another. These lenders need to verify your capability for repayment and the documents prove that.
  • Lending companies will provide loan contract once they have approved your application. Read all the details and make sure that everything is clear, everything is itemized, and no vague statements. If you are in doubt, clarify everything first. You may also add some terms if the lender will allow. You wouldn’t want your loan application lead to legal action.
  • You should always take hold of your personal documents and IDs. The lenders are not allowed to take them away and use it as a collateral. If your lender is insisting this, step back and refuse to continue with the loan application.
  • Also, take into consideration the loan repayment schedule. The terms and conditions should be clear and matches your financial capabilities. Avoid agreeing to conditions you are hesitant with.

Now that you can identify these loan sharks, you are one step ahead on getting a good lending company. Take note of the following before deciding which legal lender you will choose.

  • Check other lending companies first

Just like shopping, you have to select which company offers you the best. You may check different lending companies first before you decide which one you will use. You have to consider the different requirements needed, the assessment schemes and the interest rates. Each company varies and choose the one that suits you best. It does not matter if it is the first or the last lender you have checked. If you found a questionable company, do not engage yourself with it.

  • Use of Loan calculator

To have an idea of how much money you will loan, assess your source of income first. Afterwards, moneylenders will provide you a loan calculator to know how will you be able to manage your finances appropriately. Then the repayments will be discussed accordingly, this can be either weekly, bi-weekly or monthly. If your lender does not offer this, better look for another one.

With the information discussed above, you can get your emergency cash thru loans with confidence and assurance. Avoiding all the hustle and future trouble it may cause. If ever you do find a loan shark, you may report it to the authorities so others will be alarmed as well.