What happens if you dont pay a loan shark – if you have borrowed money from a loan shark, you might be wondering what happens if you fail to repay him. There are several factors to consider before committing to lending to a loan shark.
These factors may include the legality of a loan shark, the high interest rate he will charge you, and what happens if you default on the loan. Keep reading to learn more about these topics and how to protect yourself.
Legality of lending money to a loan shark
Although borrowing money from a loan shark is not a legal activity, borrowing from an unauthorised person is. Borrowing money from a loan shark is illegal as it requires no obligation to repay.
This is also known as predatory lending and is associated with high interest rates, high fees, and undisclosed costs. These characteristics can be detrimental to a borrower’s equity.
Generally, loan sharks operate from home and offer small amounts of money for extremely high interest rates. They do not provide much paperwork to confirm their arrangements and often use blackmail and threats of violence to make their repayments.
While they may seem friendly at first, loan sharks are notorious for causing problems and have even forced non-payers to commit criminal acts, such as prostitution or drug dealing.
Violent behaviour of a loan shark
Violent behaviour of a loan shark if you don’t get your money back is extremely common. You’ve probably heard horror stories of loan sharks breaking people’s arms. But is it safe to report the behaviour?
Violent behaviour of a loan shark is highly illegal, and you’re not safe even if you report it. You’re just adding fuel to the fire.
The loan shark may be friendly in appearance, but once you can’t pay the money back, they’ll turn on the violence. These loan sharks can be your neighbour, your local pub, your child’s school playground, or a friend’s parent.
The common characteristics of these people are that they’ll charge high interest rates and blackmail you to get the money back again. If you’re unsure about a loan shark’s motives, you can contact a confidential hotline.
High interest rates charged by a loan shark
Despite the high interest rates charged by loan sharks, this option isn’t necessarily predatory. If you need money quickly, high-risk lenders offer the fastest approvals, upfront fees, and professional explanations.
You’ll still pay a high interest rate, but the rate will be lower than a loan from a traditional bank or pawnshop. And because they’re primarily online, they’re harder to identify.
A loan shark is an illegal lender who offers loans at extremely high interest rates. Typical interest rates of a loan shark are 300% to 400% APR. Not only are the interest rates high, but there are also many hidden fees that can add up quickly.
Because loan sharks charge such high interest rates, it’s important to understand the true cost before you sign any paperwork. These predatory lenders may start out as friendly and approachable, but after you sign the loan contract, you’ll realise that you’re paying way more than you agreed to.
Defaulting on a loan from a loan shark
If you’ve recently defaulted on a loan from a “loan shark,” there are a few things you should know. Loan sharks are notorious for charging extremely high interest rates and terms that make it impossible for you to repay them.
They can even extend penalties and fees to make it even harder for you to repay them. If you’re considering taking out a loan from a “loan shark,” you should pay special attention to the repayment terms, fees, and penalties.