What Does the Term 'Loan Sharking' Mean?

Those that have ever seen a movie on television about gangs and mobs, then they have undoubtedly heard the term 'loan sharking'. Automatically people are thinking of a person who is loaning out money to cover the bets of those that are wanting to gamble or to cover their expenses. The amount of money that they loan is being held to a high rate of interest that if the person does not pay, the lender is going to take it out on the person. After all, the movies have people getting their knees and legs broke because they did not pay the loan shark what they owed them. However, the definition of loan sharking is absent of all the Hollywood glam, it is basically the loaning of money at extremely high interest rates to the person that is getting the money. With that being said, what many people want to know is if payday loan lenders are a form of loan sharking?

what are loan sharks

In all aspects of loan sharking, it is easy to see why payday loans are considered a form of loan sharking. After all, consider the many aspects that are in effect for a person that gets a payday loan. They are going to find that they are getting a certain rate for a certain amount of time. If they fail to pay during the time that was organically allotted, then they are going to have to pay another high interest rate. Much like a loan shark would charge their client. Thus, if you are wanting to avoid loan sharks, then adding payday loan services to the list is going to be the only way that you are really going to be able to avoid the loan sharks that so many people fear.

The use of payday loans are appealing, needless to say. After all, getting the money that you need now without having to worry about your credit score or other elements is something that most people are going to like. Especially in today's time in which many people are struggling with making ends meet and their credit scores dropping. It seems that this is the only alternative for these people. However, it is somewhat of a high risk chance to take. The payday loan company may not hunt you down and break your knee cap in order to get their money back, like so many movies and television shows display, but they could get your paycheck before it even comes to you, which puts a person in a hard financial position than they were in before.

The best advice that anyone can take is to avoid the loan sharking payday loan companies that are out there. Before you find that you only have this option, be sure to use every other alternative that is out there for you to use, such as finding a loan from a lender that is going to give a lower interest rate or making some kind of deal with your creditors.