Loan sharks are exploitative financial lenders that offer convenient loans with minimal or nonexistent paperwork or credit assessments. It is referred to as unsecured loans. Their loans frequently entail exorbitant interest rates and additional fees that lack clear justification.
If borrowers are unable to repay, unscrupulous lenders employ strategies such as harassment, intimidation, extortion, and direct physical aggression.
The emergence of internet platforms has provided loan sharks with fresh avenues to exploit naïve individuals. Mobile applications that offer expedited loans with minimum verification have facilitated the ability of these lenders to reach a larger audience. An extensive report by the International Centre for Investigative Reporting, detailing the methods employed by loan sharks in Nigeria to cyberbully and ensnare customers in debt, can be accessed here.
RELATED
CLICK HERE
In order to secure yourself and your loved ones from the humiliation and harassment inflicted by digital loan sharks, it is crucial to comprehend their actions and implement appropriate steps for protection.
Methods for detecting predatory lenders
StopLoanSharks, a UK agency dedicated to identifying and prosecuting illegal lenders, provides a practical approach to recognising loan sharks. As to their statement, if you possess the ability to do so
●Were you presented with a cash loan?
●Were you not provided with the necessary documentation?
●Was a substantial amount of interest or APR added to your loan?
●Have you been subjected to any threats?
●Do you experience fear around the possibility of others discovering something about you?
●Have your bank card, benefit card, passport, watch, or any other expensive possessions been confiscated from you?
The second question mentioned above serves as a clear and unmistakable warning sign for online predatory lenders. Certain online predatory lenders just require your bank verification number to grant you a loan.
The fact that it is effortless does not imply that it lacks severe repercussions.
Some digital lenders have been observed to demand exorbitant interest rates, which they may disguise as weekly or monthly rates. The accumulation of 5% per week can rapidly increase when multiplied by a duration of 4-8 weeks.
The reasons to steer clear of loan sharks
Avoiding loan sharks is of utmost importance due to various reasons, with the preservation of your peace and safety being paramount.
Although it is comprehensible that certain individuals may require borrowing funds to address urgent necessities, resorting to predatory lenders can result in a pernicious cycle of indebtedness, distress, and instability. Initially, a modest loan can rapidly escalate, burdening consumers with exorbitant interest rates and undisclosed charges.
In addition to the economic strain, obtaining loans from predatory lenders can also have adverse effects on your well-being, self-perception, and sense of worth. By refraining from engaging with predatory lenders, you can safeguard yourself against the detrimental consequences they impose, including physical, emotional, and financial distress.
I have obtained a loan from an illegal moneylender, what course of action should I take?
Initially, it is advisable to refrain from borrowing money from one source in order to repay another.
There is an immediate inclination to download another application, borrow money, and repay the initial debt. The peril lies in becoming ensnared in the hazardous pattern of borrowing from several applications.
Additionally, you should consider implementing the following measures:
1. Engage in a conversation with someone over the matter.
2. Enlist the assistance of immediate family members and close friends to mitigate the loan.
3. Assess whether any lifestyle habits may have contributed to your need to borrow. Exert deliberate attempts to rectify them.
4. Contemplate adopting a new way of living that aligns with your present financial resources.
5. Obtain employment or initiate a business venture.
6. Contemplate involving law enforcement.
Strategies for safeguarding oneself against predatory lenders
1. When you need to borrow money, make sure it is for a cause that will ultimately generate income or help you on your journey to creating income.
Minimise borrowing for discretionary expenses as much as possible.
2. To determine if your lender is a loan shark, evaluate the aforementioned questions. If the answer is affirmative, then it is advisable to explore alternate options.
3. Contemplate obtaining low-interest loans from relatives and acquaintances as an alternative. However, refrain from misusing the privilege.
4. It is essential to always have a well-defined strategy for repaying loans.
5. Ensure timely repayment of all loans.
6. Please ensure that you obtain loans through legitimate means.
Conclusion
A significant issue is the insufficient orientation provided to borrowers, so it is crucial to raise awareness among the public.
Certain borrowers perceive digital loan sharks as providing “complimentary funds,” prompting them to engage in a borrowing frenzy across various smartphone applications. Instances of individuals obtaining loans for the sake of gambling, non-essential travel, or other trivial need are frequently reported.
Loan sharks have a merciless approach when it comes to recovering loans. They charge rates and hidden fees that exceed the industry standard, disguising them under the guise of offering loans to consumers with seeming simplicity. They are frequently subjected to government shutdowns for a specific reason.
