You have probably heard of a loan shark, especially if you are in dire need of money. But what exactly are these entities? Basically, loan sharks is an entity or a person that is offering loans at ridiculously high rates and typically using threats or violence to collect debts. Generally, interests are higher than what is the established legal rate and normally, loan sharks are part of an organized crime group. It’s quite a mouthful but if you don’t want to see yourself dealing with these entities but in serious need of money, better go to https://www.accreditloan.com instead.
How do Loan Sharks work?
Loan sharks may either be a professional network or an individual who offers loans at exorbitantly high rates of interests. They might be found across the internet, via personal networks or even under-banked neighborhoods. Funds of loan sharks are often from questionable sources and they are working for unregistered entities or personal businesses.
These loan sharks are not requiring any credit reports or background checks. Instead, they will be lending the applicant big amount of money with the intent of acquiring high interests in just a short period of time. Taking a loan from loan sharks can charge interest that is way above the normal rates.
So to give you an example, a loan shark may let you borrow 10,000 dollars with the provision that within a month, it’ll be paid doubled. These lenders might be calling on debt to be repaid at the requested time or use brute force to get the payments. In most instances, business dealings with loan sharks are under the table so as much as you can, seek alternatives.
Payday Loans or Loan Sharks?
There are payday lenders that might approach or be in the same level as loan sharks. But, the rates offered by these lenders are totally legal and thus, the interest rate will be at reasonable rates. Payday lenders can also grant exceptions, charge an annual interest rate that can reach up to 400 percent. They may be seen offering higher rates as a result of special provisions provided by the state’s government.
Payday lenders are actually legal type of high-interest lending that is offered to its borrowers. Typically, they’re registered and following the standard credit application procedures and requesting personal details to the applicant to perform a credit check. Usually, payday lenders are basing the offered principle against the credit profile and income of the borrower.