There may come a point in your life when you feel like there’s no way to obtain the funding you need. If this happens, it’s natural to open your mind to any and every option – even those that don’t make good sense.

This leads to an important question: is there ever a good time to borrow money from a loan shark?

Here are some of the reasons why it’s tempting:

  • There is much less paperwork than with a traditional loan or credit card
  • You can receive an approval on the spot, as opposed to having to wait for your application to be reviewed
  • You don’t need good credit in order to qualify

With these things in mind, it’s easy to assume that doing business with a loan shark is the best way to improve your finances (at least over the short term). Unfortunately, if you decide to go down this path, it’ll likely make things worse on you over the long run. Here’s why:

  • High interest rate: Unless you’re comfortable paying an ultra-high rate, you should avoid loan sharks at all costs. You may get the money you need, but it’ll cost you big time by way of interest.
  • Lack of formal documentation: It sounds nice upfront that you don’t have to complete a long application, but a lack of formal documentation can haunt you in the long run. Don’t let the application requirement scare you away from a legitimate form of borrowing.
  • It can start a nasty cycle: You think you’re only borrowing money one time, but you soon find that you need more. And since you’re already in the cycle, you stay there because it’s the easiest thing to do. The more you borrow and the longer the relationship drags on, the more difficult it is to break free.

As a general rule of thumb, there is never a good time to borrow money from a loan shark. Even if you need money now and it seems like your only option, look into more legitimate lenders. You’ll be glad that you did in the end.

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