Unlicensed moneylenders, also known as loan sharks, are unregulated moneylenders who prey on low-income families and others who are in financial distress. Moneylenders who don’t operate under a valid license charge exorbitant interest rates, as well as use force and intimidation to scare individuals who can’t repay their loans. If you are looking for a reliable licensed moneylender in Singapore, then Power Credit is your solution. It is extremely good at money lending in Tanjong Pagar.
The following are the risks associated with borrowing money from an unlicensed moneylender.
Getting trapped in a vicious cycle
Borrowing from a loan shark may seem like a good idea at first, but it can quickly escalate into a debt of hundreds of thousands of dollars with no clear indication of when the money will be returned. Borrowers may face additional challenges, harassment, and/or intimidation directed at them or their families. When borrowers are unable to pay off their debts, they may be driven to commit serious crimes, and debt to legal firms may lead to disaster, jeopardizing evictions and other important aspects of daily living.
It Is possible that you won’t be able to repay a loan shark as unlike banks and registered money lenders, they demand a variety of costs, including service charges, late payments, additional fees, and any extra charges that make it virtually impossible to pay off the loan. Your debt will rapidly escalate due to their extremely massive interest and delayed interest charges. Some people have even turned to borrow from loan sharks just to repay loans accrued via the previous borrowing from loan sharks. This causes the debt to expand, even more, resulting in a years-long, previously mentioned vicious cycle.
Makes the borrower more vulnerable
Loan sharks exploit vulnerable people by charging exorbitant interest rates and frequently intimidating, threatening, and trapping them in a circle of violence and oppression. These thieves may appear pleasant at first, but borrowing money from them can be dangerous. Some lenders have been seen to demand a victim’s passport, driver’s license, perks, and card payments as collateral, and others have been accused of making their borrowers feel frightened or bullied. If their targets do not repay, some of them become aggressive, leaving them afraid. They prey on vulnerable borrowers and trap them in a vicious cycle of debt. They use force, threat, and intimidation tactics to victims their supposed clients.