Predatory Lendors 3 Reasons To Stay Away
The number of people and families with a bad credit in the United States along with the United Kingdom is staggering. This, coupled with the fact that many of these families find themselves in emergency financial situations a few times a year really starts tightening device on these people’s lives. It’s no wonder that many of these families have attempted to reach out to predatory lenders. These types of lenders, is you may very well know, prey on those who are financially weak and desperate and charge these people astronomical interest rates. If you are one of these people, then listen up… because this message is directed at you. Our intentions are not to make you feel bad in any way whatsoever. Our goal is to help you find healthy financial alternatives so that you can get out of this endless debt trap that you are currently in. While some may argue whether debt consolidation loans help, according to Dave Ramsey, these types of loan companies due more harm than good by actually increasing the amount of money you owe.
Reason #1 – Intentional Debt Entrapment
Predatory lenders, otherwise known as loan sharks, come in all shapes and sizes. Some of these lenders are actually licensed by your local government in the United States, as well as the United Kingdom. These types of lenders are known as payday loan companies and while these companies are highly regulated in the United States, they are not so much regulated in the United Kingdom. In the United States the average APR per $100 borrowed is around 25% plus fees. Each state is regulated different ly however. If you borrow the money for one month, it’s in your best interest to pay it back immediately because if not, the interest will roll over into the following month… Thereby snowballing your interest payment. In the United Kingdom there are currently no regulations or restrictions on the amount of interest that a payday loan company can charge. However, new laws and regulations are in the works to stop these loan sharks from taking advantage of people in debt. So the first thing you want to do is realize that one good reason you do not want to borrow from these lenders is that they will trap you in debt if you cannot pay the loan off quickly.
Reason #2 – Your Life Is At Stake
Another good reason to stay away from predatory lenders, is that while many of these lenders are licensed by the government (but not always regulated, as in the UK), there are underground loan sharks who will not only loan you the money that you require, but in the event that you fail to pay these monsters can threaten your life or your families. These types of lenders are not licensed nor regulated, and in most cases, these lenders are the worst types of lenders available. There are so many people in the United Kingdom who are unable to borrow money from high street banks, and because of the financial situation that they are in, they unconsciously turn to predatory lenders. Therefore, the second reason you do not want to borrow from predatory lenders, is because your life could very well be in danger just about borrowing money from this person.
Reason #3 – Further Ruins Your Financial History
The third reason that you do not want to borrow from these types of lenders is because it could potentially have a negative effect on your credit history and report. Should you fail to pay a payday loan lender back, this company now has the power to report you to credit bureaus and can negatively impact your credit score even worse than what it possibly is.
Our Final Conclusion
if you’re truly in a desperate financial situation and this loan is for necessity based need, honestly the best thing you can do is try to borrow money from your family or friends. Chances are, they will not have the money to loan you depending on how much money you need. However, if you do come across a family or friend who is willing to loan you the money, they will and most cases not charge you any interest at all. Just make sure that you pay this person back, as Karma has a very weird way of coming back around.