Are you under the impression that taking a loan from a loan shark is your only option? If so, you need to stop dead in your tracks and reconsider where you stand. As you look into other options, you will soon find that relying on a “predatory lender” is a poor decision that could make your financial situation worse in the near term.
In short, a loan shark specializes in offering short term, unsecured loans at a high rate of interest. To spot one of these lenders, look for the following signs:
- Not required to fill out a loan application
- Unable to answer your questions
- Extremely high rate of interest
Don’t let your need for money cloud your judgment. If you are uncomfortable with what a lender is offering, it is time to move on and consider another option.
Here are three of the best alternatives to loan sharks:
1. Turn to friends and family. There is no denying the risks associated with borrowing money from friends and/or family, however, this is a much better option than doing business with a loan shark.
When you take money from a family member, for instance, you don’t have to worry about unfair terms. As long as you know you will pay the money back as promised, this is an excellent idea.
2. Dip into your emergency fund. While there are times when taking a loan is better than using all your cash, this is not the case if you are forced into dealing with a loan shark. If you have an emergency fund and you are faced with a situation in which you need cash, this is the best place to start.
3. Credit cards. Despite the fact that using credit cards can become habit, there are benefits of this when compared to a loan shark:
- Even if the interest rate is high, it is not likely to be as high as what a loan shark would charge
- You are dealing with a reputable company
- You can make the minimum monthly payment without any concerns of retaliation or your debt growing without your permission
These are three of the best loan shark alternatives. Which option is right for you?