Loan Sharks In South Africa Versus The Law
Any form of harassment, be it from a lender, is against the law. They usually harass their victims, especially the vulnerable ones. Any loan from an illegal lender is automatically an illegal loan. Therefore, the loan shark doesnt have any legal right to recover the debt. Most times, they threaten their victims with court prosecution and imprisonment if you cannot pay back the loan. But this is not possible because the loan from the lender is an illegal loan.
Payday Loan Sharks Lurk In Internet Waters
by: Vess A. Miller, Attorney
Do you work two jobs but still cant make ends meet? Or maybe you just lost your job and are struggling to keep the lights on, feed your family, and keep a roof over their heads? Or maybe recent medical bills or car repairs have left you without the money you need to provide the basic necessities of life for yourself and for those who depend on you?If you answered yes to any of these questions and are looking for a solution, you should be aware that unscrupulous online payday lenders are waiting to take advantage of your financial situation. While lenders may portray their online payday loans as a fast and easy fix to your problems, these online payday loans could end up catching you in a net of debt that you cannot escape from. These lenders claims are as disingenuous as a shark handing its victim a life jacket for temporary safety.
It is not uncommon, for example, for an online payday loan company to charge a $30 finance fee for every $100 it lends and to renew the loan every two weeks. These types of charges can add up quickly. Take the following example:
Customer takes out a $300 payday loan with a finance fee of $90 that renews every two weeks.
Over the course of this loan:
Customer will be charged an interest rate of over 792%.
After 6 months, Customer will have paid more than $1,000 in finance charges for the $300 loan, and still owe the loan amount.
Illegal Interest Has Been Prohibited for Centuries.
Where Else Can I Get A Loan
If you need to borrow money, there are plenty of safe alternatives to loan sharks, even if your income is low and your credit rating is poor.
Commonly, people use high-street banks or building societies, which usually allow you to borrow as much as they believe youll be able to pay back. To give yourself the best chance of securing a loan this way, work out how much you can reasonably borrow and a sensible repayment plan.
If youre facing some financial difficulties, a credit union may also be a good option. Credit unions are nonprofit entities that aim to serve their members rather than make a profit, meaning that their savings rates are higher than usual and their loan rates are lower than usual. However, you have to join a credit union to have access to this, which is only possible if you meet its membership criteria.
Other options include getting a loan from a supermarket or high-street store like Marks and Spencer or borrowing from the government. The government offers a number of loans for people in different circumstances, such as a budgeting loan for those who have been on benefits for at least six months and a start up loan to help people start or grow a business.
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Affordable Ways Of Borrowing Cash
If you think you need to borrow money to pay your rent, .
Do you need cash for a new sofa in your living room, a washing machine or perhaps you have a baby on the way and want to stock up on the essentials?
With so many lending companies out there, it can be quite daunting trying to find an affordable loan that suits your circumstances.
Who could I borrow from?
There are different lenders out there, some who offer better services than others.
Banks are regulated and you can speak to someone in person about your situation.
Banks can also provide overdrafts for some of their accounts. This can be an option when you are in need of spending more one month but banks can apply an interest rate on your overdraft if it is not paid off and they can charge you if you use it without their permission
The rates they offer may differ or be more than those offered by high street bank.
Tips For Sealing With Loan Sharks
Here are some ideas for dealing with loan sharks. Watch out for these dangerous signs that may come up:
Reputable lenders dont charge upfront fees. This is a type of scam often used by crooks. They will seek to convince you to pay a fee for processing their application.
There are legitimate loans that cost money to apply for, but they are usually large loans, such as B. Mortgages . These fees are clearly stated, often in public relations documents. When it comes to a personal or auto loan, you should avoid upfront fees. If you end up paying a fee, you can be sure that they will still try to get a finders fee.
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Can I Find A Legitimate Loan Shark
No. By definition, loan sharks are illegitimate. However, there are legitimate short-term lenders that have similarly flexible eligibility criteria and offer financing at rates that meet legal requirements in your state.
Many short-term lenders will work with all credit types and are flexible about where you receive your income. You can sometimes get a payday or auto title loan that will provide funds in cash if you dont have a bank account. If you need more than a payday lender can legally offer, installment lenders often offer loans up to $5,000.
Where can I find a loan shark online?
Its possible to find a loan shark on online forums like Reddit, 4chan, 8chan or even Quora. You can also find loan sharks offering cryptocurrency loans on crypto message boards and forums. But the cost and risk of borrowing from a loan shark isnt worth it, especially when there are plenty of legitimate alternatives out there.
Loan sharks vs. payday lenders vs. tribal lenders
You might have heard of payday and tribal lenders referred to as loan sharks. But these are technically legitimate lenders, even if they can be extremely expensive.
What Is A Loan Shark How To Find One In Craigslist
- Have you ever gone to someone for a loan, and they did not provide you with any paperwork?
- Did they give you a cash loan and added a large sum of interest to your loan?
- Did they threaten you or take your bank card, passport, or other significant item and details?
The answer to these questions is yes. You might likely have dealt with a loan shark.
What is another word for a loan shark? If such a question is on the mind, then do not worry we have the answer for you. Loan sharks are also known as moneylenders. They usually single out families who belong to low-income backgrounds or are going through some severe financial crisis. Authorized moneylenders are directed by the Financial Conduct Authority and must follow the FCAs training codes. Loan sharks are not authorized and work outside the law. If you deal with them, its conceivable youll:
- receive a credit/loan on awful terms
- pay an enormous amount of interest
- to be endangered if you get behind with your reimbursements
- be forced into getting more from them to reimburse one debt with another
A loan shark is an individual who advances cash at incredibly high interests and frequently utilizes brutality and threats to gather debts. They are unlawful moneylenders who regularly target low pay families.
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How To Check A Lender Is Legitimate
The Financial Conduct Authority keeps details of all authorised lenders.
If a lender isnt listed as having current authorisation to lend money, dont borrow money from them and dont let them come into your home.
To see if a lender is authorised, check the FCA Financial Services Register on the FCA website
How To Identify A Loan Shark
Identifying a loan shark is very important before venturing into any form of loan. This enables you not to be a victim of their exploitations.
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Are Loan Sharks Illegal
Technically, because lending money without a license is illegal, being a loan sharks is illegal. The term loan shark generally refers to illegal lenders or predatory lenders. Most loan sharks operate without a license. This is so they can charge interest above the regulated rate. To ensure youre not dealing with a loan shark, do your research before you take out a loan. Check to see if the lender youre working with is licensed. In most cases, dealing with a loan shark is illegal, so its best to seek out an alternative source of funding.
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If You’ve Borrowed From A Loan Shark
If you have borrowed money from a loan shark you are under no legal obligation to repay the debt. If a lender isn’t licensed by the FCA then they have no legal right to recover the debt.
Loan sharks sometimes frighten people by saying they’ll be prosecuted and even sent to prison if they don’t pay up. This can’t happen – not repaying a loan from an unlicensed lender isn’t a criminal offence.
You should contact your local Trading Standards office immediately. It will help you deal with your situation and the loan shark.
How To Spot A Legitimate Loan Company
Regardless of whether you have underneath average credit, many organizations offer fundamental advances. So while looking for a decent loan specialist, start with these means:
- Check for contact data. A loan specialists telephone number, email address, and physical location should be promptly accessible on the site, regardless of whether its an online-just bank.
- Explore online audits. Clients posting on Google and Yelp will have the best understanding of the experience of working with a loan specialist.
- Take a gander at the Better Business Bureau. The BBB is a decent method to see whether a bank is reliable, and its likewise a hotspot for client surveys.
- Ensure its enlisted. Genuine moneylenders must enroll with state organizations before giving out credits. In case youre uncertain if a bank is sheltered, contact your states lawyer general.
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Can Loan Sharks Kill Their Victims
Accordingly, loan sharks are referred to as Loan Sharks since they are like sharks. They are angry, aggressive and greedy. Besides that, to get their enormous interest rates and loan repayment, they can do many illegal things. These illegal things could be the kidnapping or even killing of their victims.
Read The Contract Carefully
To avoid unnecessary scares, check the financing conditions when you are looking for a loan. You should read the contract before signing it. You need to know that what is important is what you sign. Keep away promises and other terms that dont appear in the document.
Take your time and dont feel pressured by others. You need to understand all the details. And if there is anything you dont know or have questions about, dont hesitate to ask.
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Major Characteristics Of Loan Sharks
Loan sharks do not adhere to the microlending rules, so they should not be taken lightly. If you are unsure of the lending criteria, take note of the following when you submit an application:
- The maximum amount of the loan is R10,000
- Loans should be paid back within 36 months
- Payment cannot be paid back using other forms of credit
- The business must be registered with MicroFinance South Africa.
Best 5 Reasons To Avoid Loan Sharks
Whilst loan sharks can provide you with quick cash when youre in need of an urgent loan, they could be the start of sending you into a debt spiral.
So if you get the I need a loan shark thought in your head dismiss it quickly as their are better options available.
Its also so easy to find loan sharks online making them very accessible to anyone & very tempting to use if you cant get loans through traditional banks & credible money lenders.
One things for sure, if you are going to borrow money from loan sharks in Johannesburg or Pretoria or anywhere else in the world, you had better be more than 100% sure that you will be able to make the loan repayments in time.
Warning: Loan sharks are not well known for relaxing their repayment terms if youre having trouble coming up with the money.
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RCS Loans is now one of South Africas leading personal loans a loan online. Nedbank Personal Loans. are not ones for personal loans and loan sharks, Hoopla Loans is a payday loan and personal loan provider in South Africa. Apply today and get approved within the day!
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How Loan Sharks Almost Ruined This Womans Life
This scary story, reported by Fin24, relays how a young woman almost had her life destroyed by a loan shark.
It all started after her father died & she needed money urgently to pay for his funeral.
Unfortunately she didnt have a funeral policy or any savings that she could use to give him a dignified burial so she approached a loan shark to borrow the cash.
All she needed was R6,000 but as she was unemployed at the time she knew she wouldnt have any success with traditional lenders so, in desperation, she borrowed the money from a township cash lending business.
What happened next?
After handing over her ID document & signing a whole bunch of papers, which she didnt have time to read, the received the R6,000 in cash a couple of days later.
It turns out that she had unwittingly signed over her house to them in the event of her not paying & eventually ended up paying them about 10 times the amount of the original R6,000 loan.
She was afraid of them selling her house & keeping the full amount as well as a story of a friend of hers being beaten up by them for not paying timeously.
In order to make the payments she had to move out of her house & rent it to get some money in whilst sharing a place for her & her children to live with someone else.
It was an expensive & painful lesson for her and unsurprisingly she says she will never approach a shady money lender, aka loan shark, again.
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How Do You Solve Loan Shark Problems
The best thing to do is to avoid any loan with them. However, if they have already lent you the money, the best thing to do is honor what you agreed to beforehand. Not all loan sharks can be bad at all. Much will depend on the context you want to access the loan. It mostly depends on your particular situation.