The organization and security of your finances are things you should never neglect. This care should, moreover, be redoubled when we talk about the search for financing.
Even if you haven’t resorted to any kind of credit yet, it is possible that you will feel the need at some point in the future. And, in an emergency, you might be tempted to take more risks .
For this reason, it is important that you know what loan sharks are and how they operate, as they may try to take advantage of situations of greater desperation.
First of all, it is essential that you are aware of the existence of numerous fraudulent schemes around the loan shark phenomenon .
In this article, we will make you aware of the uncertainty associated with moneylenders who lend money, detailing the risks of this financing and offering alternative, regularized and reliable solutions .
What Are Moneylenders?
Simply put, moneylenders are individuals or institutions that act “outside the law” in granting credit.
Its offer is that of financing but with the absence of risk control mechanisms .
The main appeal for those seeking this type of financing is based on the meager bureaucracy involved in the process. A moneylender will not inquire about the destination of the money, but he will not give any guarantees of honesty either .
In addition, moneylenders apply interest rates that are much higher than traditional financial institutions. These rates even exceed the legal limits established by the Bank of Portugal.
Since they operate independently and unregulated, moneylenders are free to set their own rules . Therefore, like private loans , these credits should be avoided at all costs.
If, perhaps, you are in an uncomfortable economic situation, in which you need financing more urgently, it is important to understand that there are alternatives regulated by official entities in the market.
The proliferation of loan sharks in Portugal, and worldwide, is closely linked to technological progress.
The truth is that the emergence of social networks and the spread of the Internet, easily accessible to all, is the ideal scenario for extortion of this caliber to be born .
Therefore, you should question any promise of easy money online . Any and all legitimate entities will also invest in the use of careful and legitimate means of dissemination.
What are the Risks of Moneylenders?
It is universally accepted that any type of loan carries an inherent level of risk.
However, when dealing with loan sharks, you should be prepared for unpleasant and harmful occurrences depending on the circumstances in which they operate.
In the case of loan sharks who lend money, the probability of losing their capital , and even other valuables, is higher than with traditional loans.
This is because all contractual stipulations are defined by loan sharks, who have all the negotiating power and tend to strongly inflate the numbers in their own favor .
Taking advantage of the urgency and financial precariousness of those looking for this easy credit, moneylenders will stipulate unjustifiable interest rates and may demand personal assets as collateral for the loan , such as vehicles or real estate.
Another tactic frequently employed by moneylenders is to request payment of an initial commission before making the loan available. It is common to pay this amount but never get any capital back.
⚠️There is no easy and reliable moneylender in Portugal that provides you with credit in a safe, legal and honorable way.
A seemingly beneficial aspect for anyone in a situation of banking problems is the absence of legal proof of the transaction . This factor, by itself, is one of the axes on which all the insecurity of the procedure is based.
The reality is that, in most cases, you will never receive fair funding from loan sharks . It will end up falling victim to scam schemes and will not have any documentation to safeguard it.
? Moneylenders are not authorized by Banco de Portugal . Get to know the authorized and registered financial institutions if you are looking for financing.
What Credit Alternatives Are There?
As is all too evident, there are viable, safe and legitimate alternatives to moneylenders.
With the aim of regularizing your financial situation, we present you with versatile options, commonly offered by traditional financial institutions.
Consolidated Credit
If you are having difficulty paying your installments, applying for a consolidated loan may be the solution for you.
This financing may grant you greater financial flexibility, since it is based on the merging of your credit monthly installments into a single one .
When resorting to consolidated credit with a financial institution, this acquires the obligations it has with its creditors, adding interest to that total amount owed.
Thus, the payment period is extended and the installments are diluted.
Consolidated credit has benefits for the consumer, since it has generally more attractive interest rates , allows savings on commissions and makes it possible to request subsequent financing.
If you intend to apply for this type of loan, the first step should be to resort to a consolidated credit simulator to find the best savings offer for you.
Personal credit
If you think that consolidated credit is not the right choice, you can look for the conditions that would be offered for financing through a personal credit .
If you don’t have contracted credits that you can consolidate, personal credit continues to be a much safer alternative than resorting to loan sharks .
Interest rates will be lower and you will have legal financing .
The advantages of personal credit are based on the interest rates that will be presented to you, on the speed of financing and on the ease of the process.
Credit card
Although they have higher interest rates than the previous options, credit cards also present themselves as a better alternative than loan sharks.
Keep in mind that, if you use this type of credit, you must settle all your debts within a period of 20 to 50 days .
If you don’t, you’ll activate the installment payment model and the longer you take to settle the amount, the more interest you’ll pay on it .
The settlement period and interest rates vary from entity to entity. It is recommended that you inform yourself about the conditions associated with your credit card.
Conclusion
While it is very important for your well-being to have your finances in order and a financial break, security should be the top priority when looking for financing .
This concern must be especially reinforced when the objective is to obtain a more urgent and less bureaucratic credit .
Loan sharks are a dubious method of financing , which can even be dangerous, and which you should avoid at all costs.
There are other alternatives to loan sharks who lend money through regulated, reliable and legal methods.
This is the case of consolidated credit, personal credit and credit cards. Therefore, you should know your options and make the necessary comparisons to find the best one .