Loan Sharks – What You Need to Knowadmin
The shared loan is the practice of lending money to desperate people with extremely high and illegal interest rates. Loan sharks, or shylocks, derive great benefits from people who can not get loans from legitimate sources, such as banks or other lending institutions. While people have needed money they do not have, there have been loan sharks to provide their services in exchange for a fee. They are presented as a solution to a problem; They are entrepreneurs who want to help a borrower get out of a bind. The prey of these sharks can be compulsive gamblers, single parents, elders, illegal immigrants, white-collar executives or anyone else who unnecessarily needs more money than they have access to.
Most people associate shark lenders with gang members and organized crime. Loan loans are a very lucrative business for criminals, and are an important source of income for criminal families. They receive a very good rate of return on their investment, and in a short period of time, often in a matter of weeks. They can charge interest at rates of up to 20% per week, and possibly even more. In a New York investigation, it was discovered that a shark syndicates union was obtaining an annual interest rate of 3000%. The Dallas mobsters had a more competitive price, charging only 585% annual interest. These were the rates in the ghetto. The shylocks would have a more competitive price for corporate white-collar businessmen; The rates could be more in the weekly range of 5%.
In the mafia world, shylocking is also known as six by five; borrows five and pays six at the end of the week. You can see how this can be very expensive. If someone borrowed five hundred and did not have full payment, the loan shark would accept the interest payment of one hundred and extend the loan for another week, with interest. If they can not pay when they are supposed to, they would be forced to take another loan, the interest is added to the interest and the debt can quickly become impossible.
The funds for shylocking would usually come from the top, the head of the family. The boss would lend money to his capos (lieutenants), knowing that he could trust that he would be paid with interest. The capos then lend money with interest to the lower-ranking mafia members. These are the loan sharks that made loans to the common citizen, and the forced payment.
The loan sharks secured the payment with threats of violence. They do not require any other guarantee than that of the borrower and the welfare of his family. The “leg breaks” were often used by the sharks on the loans to make sure they received the payment. It is not true that people were always killed if they did not pay. The dead can not pay their debts, so it would not be good commercial practice to eliminate resources. “They made an example” of some who owed very little to be sure that other borrowers took them seriously. The borrower, concerned about life and the extremities of himself and his family, would have no choice but to pay the shylock, even if that meant he had to lie, cheat or steal.
Predatory loans of today
There is no legal definition for abusive loans, but it generally includes the use of unethical practices by lenders who use tactics that surround the law. They can give unfair loan terms, use confusing language, charge hidden fees and use high-pressure sales methods. They make money as long as they can keep the borrowers indebted. Typically, they target seniors, low-income, minorities or people with bad credit, but anyone can fall victim to these unscrupulous lenders. Predatory lenders thrive with consumers who need or want more than they can afford, and trick borrowers into believing that loans are necessary and affordable.
Many commonly accepted loan services are available to consumers who work with the same principles as a mob shylock. There are laws that regulate the amount of interest that can be charged for a loan, but lenders may charge “service fees.” Check exchange places offer “payday loans”, you can write them a post-d