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Personal Loans from Loan Sharks for People with Bad Credit (Bad Idea)

By Edited May 19, 2016 3 2

Before you consider a personal loan from loan sharks for people with bad credit, you need to know about some of the potential dangers you could face.  In addition, it may be wise to explore the additional options you have that are actually legal and ethical.  Whether you need $500 or $5000, you will have some options to borrow money quick, even if your score isn’t up to par with what the banks want.  Let’s explore why you don’t want a personal loan from a loan shark, and look at some options to keep in mind for people with bad credit.

Dangers of Loan Sharks

If you are looking at personal loans for people with bad credit with no luck getting approved, it’s easy to fall into the trap of using this type of person to borrow money from.  Let’s explore some of the reasons you simply don’t want to enter this type of transaction, along with some of the pitfalls they represent.  I’m not going to go all Hollywood on you, but there are some legitimate dangers you must keep in mind as you look to borrow money this way.  Just looking at your options for personal loans from loan sharks for people with bad credit is not a good sign.  Be sure to protect yourself from this type of transaction.

Ridiculous Interest:  They are known for charging people they borrow money to with ridiculous interest rates, which could make repayment next to impossible.  You don’t want to fall into the trap of not being able to repay the personal loan.  People with bad credit that borrow from loan sharks often pay rates of interest which are informal, and absurdly high.  This is perhaps the most common concern with borrowing money from these types of lenders.  You must not put yourself in a position where you cannot make the payments.

Poor Repayment Terms:  You may have to pay the money back in a lump sum.  You may be able to make weekly or bi-weekly payments.  It’s all up in the air.  Why not use a more traditional lender where you know exactly what the repayment terms are?  Since many times, these types of arrangements are pretty informal, you really have limited safeguards on your side to help out.  The repayment terms that are less than adequate are not stacked in your favor.

Illegal Transactions:  Many times these types of arrangements are actually illegal.  Some state laws mandate the amount of interest and how it can be charged on personal loans, even for those with bad credit.  Don’t enter into a potentially illegal transaction with a shark.  This is something you must consider.  Not only could you be entering a financially dangerous situation, but one that is illegal as well.  Don’t get yourself into more trouble than what you are already in if you are even considering personal loans from sharks for people with bad credit. 

Failure to Pay:  Maybe I watch too much television, but what will happen to you if you don’t pay the money you borrow back?  I suppose it doesn’t always work out the same in real life as it does in Hollywood, but the reputation of these lenders should be more than enough to make you super cautious before you enter this type of transaction to borrow money fast.

Other Options

If you are even exploring the idea of personal loans from loan sharks for people with bad credit, you may first want to make sure you explore all of the options you have.  This will keep you from entering a potentially dangerous and illegal situation.  You might want to explore ways to improve credit scores fast.

Peer to Peer Lending:  This is generally a very legal way for you to borrow money, even if your financial history is less than desirable.  You will find many sites that are dedicated to this type of lending out there, so you won’t run out of options.  Some may require a check on your repayment history, while others may not.

Car Title Borrowing:  Those considering a personal loan from loan sharks for people with bad credit may want to consider borrowing against their car title.  While you will pay a hefty rate of interest, you will also be able to get money quick this way.  If you have a free and clear car title, keep this option in mind as you explore the possibilities for borrowing money quickly.  This is a fully legal option that deserves at least some consideration if you need to borrow money fast.

Borrow From Friends:  If you have some good friends or family members that can afford it, perhaps you can borrow some money from your parents.  You can make a contract up for this transaction, so it helps to protect both you and the lender.  You must use caution when you do this.  Failure to pay could put a massive strain on the relationship.  Before you go ahead and borrow from friends or family members, sit down and make sure you are in a position to repay or you will stand to lose much more than money.  You don’t want to lose or damage relationships with friends and family over some money.

Online Lenders:  If you are looking at personal loans from loan sharks for people with bad credit, you may want to consider high risk lenders online.  You will pay high rates of interest with these types of lenders, but the transactions are legal, and you won’t have a guy with a baseball bat showing up at your door if you miss a payment.  Explore this option carefully and see what you find.

Sell Off Assets:  If you need to borrow money fast, why not try to sell off some unneeded items?  You can potentially avoid the need to borrow money this way.  If you have a boat, ATV, X Box, or just about anything else of value, you can raise hundreds or thousands of dollars this way.  If you don’t need the personal loan immediately, even if you have very bad credit, this can help you to avoid using a shark for your financial needs.

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Jun 17, 2011 7:13pm
Whew! I am so glad that you have let people know what a bad idea it is to borrow money from a loan shark! It is so easy to get yourself into a really awful situation with some of these loans!
Apr 2, 2013 12:37pm
I hate the idea of having my arm broken for missing a payment, the other options that you've given in terms of car title loans and peer to peer lending are really good ideas and will really help people who are having problems getting credit. Personally I would go for P2P lending as you can get the money really quickly even if you have bad credit and pay less than a payday loan.
Great article, thumbs up.
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