Loan Sharks Vs. Legitimate Lenders: Know the Difference Before Making a Mistake

There is a stark difference between a loan shark and a legitimate money lending business. Loan sharks are dangerous and illegal individuals or groups, often connected to organized crime, while legal lenders are just the opposite – legitimate, registered companies.

Given that most people look for loans online nowadays, loan sharks have also shifted to online formats to find their victims over the internet. While there are multiple ways to differentiate between a properly registered business and an illegal organization, desperate times can mislead us towards making a mistake.

Why Loans Sharks Are So Dangerous

As loan sharks do not follow the rules and regulations set forward by any government, taking a loan from them is a huge mistake. Making such a mistake can result in consequences that go above and beyond even debt and bankruptcy. Extortions, intimidations, and life-threatening consequences are all possibilities here if the person in debt fails to pay their exorbitant interest rates in due time. Take heed of the signs below and stay away from shady websites that promise easy money in times of extreme need.

Contact Details are Absent or Seem Personal

A legitimate business should have its domain and email address, along with one or more, officially registered, business phone numbers/numbers. If the contact email address reads something like geteasymoney@gmail.com, you should not be dealing with them. Also, providing a personal mobile number, instead of a legitimate business number for contacting the company indicates a shady business.

A worst-case scenario would be where the contact details are completely absent, but they ask for your number and email ID instead. They could be loan sharks or scammers, and neither are the types of people that you should be interacting with, so do not provide them with your contact details and steer away from the website.

Unclear and Dubious Interest Rates and Instalment Terms

As is always the case with shady businesses that operate on the wrong side of the law, a loan shark’s website will not have clear, assuring details regarding how much interest you would have to pay them and for how long. On the other hand, if you visit a well-known and properly registered business lender all details regarding the fixed monthly installment amounts, interest rates, tenure of the loan, etc. can be easily found on their website itself.

This applies whether you are looking for a line of business credit, a cash advance, or an equipment lease, although depending on the kind of loan you take, the terms, tenures, interest rates, etc. will vary.

Finally, a loan shark will not transfer money to your bank account online, rather they will want to pay you in person and in cash. Even if they do transfer money online, expect an offline element added to it as well. Someone may come in for a visit before the amount is transferred. Never take such risks, to begin with, and only deal with hard money lenders that have at least some reputation for you to rely on.