Actually, it would be more accurate to say that borrowing from a loan shark is a VERY bad idea. In case you were wondering, having a loan shark know your name and where you live is about as unswanky as it gets. For the purposes of this article, we’ll define a loan shark as an unlicensed moneylender who charges an exorbitantly high rate of interest, then uses threats and violence to intimidate people who can’t pay back the loan. For a possibly accurate look at the life of a loan shark, read the book Get Shorty by Elmore Leonard. You can watch the movie if you like. It’s pretty good too.
Why are we even wasting your time talking about loansharking? It’s such a stupid idea to get involved. You would NEVER even contemplate such a thing, right? Well, sometimes people get desperate and then they get their knees broken. None of us want that, so, for the uninitiated, here are some tips on how to spot a loan shark.
They Can be Friendly at First – Don’t assume you can spot a loan shark right away by his scary demeanor. He might be all cuddles, kittens, and puppies – until you miss a payment.
You Don’t Need No Stinkin’ Paperwork – What is one thing you can count on with a traditional loan? Paperwork, right? Enough to sink a battleship. Well, it should come as no surprise that loan sharks don’t worry much about paperwork, and there probably won’t be much of it.
Up the Ante – Another common loan shark tactic is to increase the debt or add in other amounts that seem to have come out of thin air. When you raise questions, they reach for the baseball bat.
High Interest Rates – There are high interest rates and then there are HIGH interest rates. If you’re paying 131,000 percent above APR (this actually happened once) there’s a good chance you’re a victim of loansharking. If you’re going outside traditional lending institutions, learn to calculate interest rates and know what constitutes insanely high.
The bottom line is that if you borrow from an illegal lender, the crime is not yours. He or she is the crook and there are stiff laws governing usurious lending. Turn ‘em in. And possibly consider changing your identity.
The Jake Swank Team
Flickr / electricnerve