Debt Loans

Desperately Need a Loan Shark: 7 Alternatives

Have you ever been in the middle of a financial emergency and thought, “I desperately need a loan shark!”? Dealing with financial stressors like student loans, credit card debt, medical expenses, or unpaid bills can leave anyone feeling hopeless and desperate for a loan.

While the loan amount offered by a loan shark online may seem appealing, they are not worth the risk. Loan sharks are often exposed as illegal lenders due to the high-interest rates they charge or other predatory lending practices. 

To avoid working with unlicensed loan sharks, staying informed about the types of online lenders and loan products available when you need money is vital. 

What Are Loan Sharks? 

Loans sharks are predatory lenders who often function under illegal conditions, which means you won’t find many licensed loan sharks online. Loan sharks use predatory lending practices like bait-and-switching and sometimes even blatantly false advertising. 

Funding from loan sharks can also stick you with a loan contract and loan terms that don’t work for you. And since loan sharks have their best interest in mind, not yours, they are often unwilling to work with borrowers regarding refinancing for better rates and terms. 

To ensure you don’t get stuck with a predatory loan shark, research your lender before signing your loan agreement. Perhaps look at customer reviews to see what the experience was like for other borrowers or compare loans to find the best rate. 

Check out the alternative funding options below, so you don’t have to worry about loan sharks! 

What Are My Funding Options To Avoid Working With Loan Sharks? 

Personal loans are usually an option available for those with bad or poor credit when borrowing money. Depending on your financial needs, there are personal loans in the form of secured or unsecured loans. An unsecured loan uses the borrower’s credit history to determine loan credentials, while a secured loan uses collateral. 

There are long-term and short-term lenders who offer a variety of personal loans. Take a look at some of the most common options below. Chances are, you will be able to find a lender who will work for you much better than any loan shark could! 

Installment Loans 

An installment loan is a flexible personal loan that comes with adjustable loan terms and competitive interest rates. Unlike other funding options, installment loans give borrowers the financial freedom to pay off their loan early without including any balloon payments or pre-payment penalties. 

An installment loan is also unsecured, meaning borrowers do not have to put up any form of collateral in order to get approved. Instead, installment lenders look at credit history and other financial information. However, don’t be discouraged from applying for installment loans if you have a poor credit history. Since these loans are so flexible, loan amounts and individual payment plans are available for people with both high and low credit scores. 

Payday Loans 

Payday loans are small-dollar loans that usually come with very high-interest rates and short repayment terms. Since payday loans are typically on the lower side, payday lenders often expect full repayment within a couple of weeks. If you are budgeting with irregular income, you may find a payday loan a colossal inconvenience. 

Borrowers who work with a payday lender and need more time to pay often find themselves in a situation where their monthly payment becomes unmanageable. The high-interest rates that come with payday loans can actually cause the balance to increase some months! So, unless you can repay your payday loan quickly, you may want to consider other funding options. 

Car Title Loans 

Car title loans are a type of secured personal loan that requires the borrower’s vehicle title as collateral. While you repay a car title loan, you get to keep your car to drive like normal, but the lender will sign onto your vehicle title as a lienholder. This means that your title loan lender holds legal ownership of your vehicle and has the right to repossess it if you default on your loan. 

If you are considering a car title loan, you should be prepared to pay higher interest rates. Similar to payday loans, title loans are also meant to be short-term loans paid back within a relatively short amount of time. If you don’t pay back your title loan quickly, you may also find yourself in a situation where your loan payment increases month-to-month. 

Credit Card Cash Advance 

As an alternative to cash loans, you may be able to utilize the cash advance feature on your credit card. Almost every credit card has a feature where users are able to get a cash advance up to their credit limit. Keep in mind that if you request your total credit limit for your cash advance, you will be unable to use your credit card for the rest of the month. But, credit cards are revolving lines of credit, which means you will be able to use your card and withdraw more money after your next monthly billing cycle. 

Secured Loans 

You may qualify for certain secured loans if you have collateral with equity. Title loans and home equity loans are perhaps the most common types of secured funding. With a home equity loan, an appraiser would come to your property and give you an estimate on how much it’s worth. The borrowers would then put their house up for collateral in exchange for funding. 

Suppose you are having trouble keeping up with your original mortgage payment. In that case, you may be considering getting a second mortgage via a home equity line of credit. Just keep in mind that if you fail to keep up with your loan payments, you are at risk of losing your home entirely. 

Brokered Loans 

Borrowers who are new to finances and the lending industry often turn to loan brokers because they think that’s how they’re going to find the best deal. But, you may want to work with an online lender directly. Financial institutions like brokers may only be recommending a lender to you to receive a commission for themselves. However, brokers usually only work with accredited lenders, so you probably don’t have to worry about a broker recommending you to a loan shark. 

Credit Unions 

Another alternative to working with loan sharks is working with a credit union instead. Credit unions have both large and small loan options available to people who fit certain qualification requirements. Furthermore, credit unions are nonprofit organizations, meaning they are more likely to cater to borrowers’ needs. If you meet the criteria for funding via credit unions, you could take advantage of special interest rates, individualized payback terms, and even refinancing perks! 

But, if you fail to meet even part of the eligibility requirements, chances are you will unfortunately not receive approval. 

Do I Need a Bank Account To Borrow Money?

Not every lender will require their applicants to have bank accounts, but some will. If you do not have a bank account, now may be an excellent time to get one. Those looking to save money and keep their finances organized almost always have a checking and savings account. 

When you give a lender your bank information when you apply for a loan, they can send your approved funds directly to your checking account. Direct deposit is by far the fastest way to receive your loan money.

Can I Get Personal Loans If I Have a Bad Credit Score? 

Some bad credit borrowers may think their only option is a loan shark, but thankfully this isn’t the case! Thanks to the versatility of personal loans, people with both high and low credit scores have the opportunity to get approved for funding. 

To understand online loans for people with bad credit, it’s essential to be familiar with what a credit score is and how they impact your loan. A combination of factors and behaviors regarding your finances help determine your credit score. Behaviors like how on time you are with making payments, how often you apply for credit, and more can affect your credit score. For example, if you have trouble staying on top of due dates and have a lot of missed payments on your record, this behavior may have a negative impact on your credit report.

There are three major credit bureaus that record your credit report information and give it to inquiring parties when they perform credit checks. Three main credit bureaus are Experian, Equifax, and TransUnion. 

To stay on top of your credit score, you may want to perform soft credit checks often, so you’re always familiar with your score. When you have a general idea of the score lenders will see when they perform their credit checks, you can better understand your loan details. For example, your credit score will help determine payback terms, interest rates, and how much money you may be approved for.

There is no reason ever to consider requesting funds from loan sharks between the bad credit personal loan options available. Stay safe by only working with licensed, credible lenders!