Properties & Procedure of unserious loan sharks

The loan sharks

Even if more people are killed by a falling coconut than by the bite of a dangerous shark, a shark – or even the thought of a shark – sets many people in fear and terror. The shark is dangerous, you just should not get too close! The situation is similar with the so-called loan shark, which owes its name to the connotation just mentioned.

A loan shark is a dubious lender or credit intermediary who has no other intention but to draw money from borrowers with mostly dishonest methods. Since its funds are generally dodgy or even illegal, a loan shark usually occurs outside of the rule of law, that is without the approval of the banking supervision. (In Germany, the task of banking supervision falls to Bank.)

Usury, dubious contracts, etc. – the loan shark is “inventive”

It is typical for a loan shark that its greed on closer inspection is already clearly evident in the loan agreement. Particularly high interest rates characterize the contracts, in which a loan shark is a contractual partner. Similarly, loan shed contracts often include pre-cost, administrative and high side fees.

Not infrequently, business with loan sharks are not only immoral, but also immoral under German law. Anyone who has been ripped off by a loan shark should have the signed loan agreement checked for interest-rate usury. If there is an interest-usurp transaction, the credit agreement can be annulled because its interest and fees are clearly too high, therefore no longer in line with the market and finally no longer legally compliant.

Granting of loan applications even without credit rating?

Loan sharks often grant loan applications made by credit seekers with very poor credit ratings. However, the disbursement of the loan amount in these cases is often linked to initial costs. The higher the probability of default, the higher the initial costs and interest rates – many loan sharks argue.

But even after the pre-payments have been paid, it is not always ensured that the agreed loan amount will actually be paid by the loan shark. Many simply cancel out the often outrageously high initial costs and then disappear on never to see again over all mountains. Loan sharks doing this often do not require loan collateral, because they already know that they will only pocket the initial and initial charges, but will never pay the loan.

To collect due installments or due loan amounts

If the loan amount is actually paid out, a loan shark often uses questionable methods to ensure that the total loan amount, including interest and administrative fees, is repaid by the borrower. For example, the threat of violence by violent groups can be one of these methods.

The higher the likelihood that the lender will have to give up his money, the more intense he is when collecting due installments. People who can not repay their loan, which they received from a loan shark, quickly find themselves in an ugly spiral, from which they find it very difficult to get out again.

Avoid contracts with dubious loan sharks!

When looking for an instant loan, you should avoid making it into the cradle of a credit bank. Loan sharks can make a borrower’s life hell. At the very least, they will use every possible means to get their “contractor” out of their pockets as much money as possible.

Read loan agreements carefully and perform credit comparison

So before signing a loan agreement, it is extremely important to read all the sections and conditions very closely. In addition, one should get experience reports, customer opinions and assessments of the lender or credit institution. Furthermore, it is important to compare different loans in order to find the best possible loan offer. Who wants to get to a loan shark that sends one from Pontius to Pilate?

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