5 Reasons Why You Should Not Borrow From Loan Sharks



1. The interest rates are endless.

Have you ever heard the term 'ten-three'? It refers to the interest rate charged to the borrower. The interest rate on ten-three means that for every RM10 borrowed, the interest will be charged RM3. In other words, the amount of money you borrow will be charged with interest of 30% in just one month!

To give you a clearer picture about the amount of money you need to pay back if you make a loan from loan sharks, let's see the example below:

The amount borrowed: RM1,000

Interest payable (per month): RM300

Interest for loans 12 months: RM3,600

The total amount to be paid: RM4,600

Are you still interested in making financial loans from loan sharks? Ten -three is not a sole interest rates offered although obviously it is very high. The interest rates offered by loan sharks also includes a ten-four and ten-five, depending on the amount of the loan or the borrower's credit situation. Imagine how high the interest you have to pay if the loan amount you are charged interest rates on ten-five!

2. The hidden cost and terms.

Unlike banks and financial institutions that are licensed, loan sharks do not necessarily have the terms and conditions that clearly in-detail before you sign the loan agreement. You will never really sure about additional costs and charges that may be signed if you mistakenly missed a repayment schedule.

Of course they will promise sweet words to you verbally before you sign your loan agreement, such as fees and charges is small, or the repayment schedule can always be discussed again.

But, most of their oral promises are far from reality. Just as banks, loan sharks charging penalty interest rate if you pay late or missed payments. But the penalties imposed are often much higher than the bank. In addition to that, as long as the conditions do not appear in black and white, loan sharks can change the rules and the interest rate at any time without any obstacles.

3. Important personal documents were taken as the 'deposit'.

Identity card, passport and bank cards are often kept by loan sharks as a 'deposit' or security to ensure the continuity of payment even though it is against the law. This is one of the tactics by loan sharks to ensure that you are not going to run away before completing your debt.

Identification documents are your rights before the law, and can only be taken by law enforcement for official matters only. By pledging your passport or identity card for borrowing money is not worth it, because they can easily misuse your personal information without you realizing it.

4. There are no options for full settlement.

Loan sharks rarely allow you to solve your debt at once, even if the cash required is already available in your hands. This is to ensure you are paying the high interest as long as possible for their own benefits.

5. Will be forced to take loan from other loan sharks to solve debt.

If you are in difficulties to repay your loan, they will put pressure on you to take a loan from another loan sharks to fully repay the debt with a reason to make sure you avoid from paying more interest and charges in the long run.

Do not be fooled! Actually they lure you to be bound by a greater debt and higher interest.

Thus, the question is, do you still want to borrow from them?

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