What exactly is loan sharking?

[phantom309]

Originally posted by: dullard

Originally posted by: natedawg
I read something a while back about loan sharks. If you need a loan, loan sharks are the way to go. They typically charge much less interest than one of those pay-day loan businesses which can charge several hundred percent on their loans depending on how much you borrow.

Or you can borrow your money by more conventional ways and save a bundle over the loan shark. But you are right that pay-day loan businesses are possibly the worst money mistake that anyone could ever make.

The people who go to loan sharks usually can't qualify for conventional bank loans, either because of poverty, bad credit, no credit, or wanting to borrow money for stupid/illegal reasons. A lot of minorities also are deeply suspicious and resentful of going to the bank and asking Whitey for a loan (quite often for good reason). That's the allure of the loan shark; he always has money to lend NOW, he usually doesn't ask too many questions, and he doesn't care if you can't really afford to pay him back - because he knows you WILL find a way.

 

[Vic]

Originally posted by: phantom309

The people who go to loan sharks usually can't qualify for conventional bank loans, either because of poverty, bad credit, no credit, or wanting to borrow money for stupid/illegal reasons. A lot of minorities also are deeply suspicious and resentful of going to the bank and asking Whitey for a loan (quite often for good reason). That's the allure of the loan shark; he always has money to lend NOW, he usually doesn't ask too many questions, and he doesn't care if you can't really afford to pay him back - because he knows you WILL find a way.

What? Discimination is a thing of the past in lending. Banks and lenders are very eager to lend to minorities in order to meet their federal HMDA requirements (think: affirmative action in lending).
Credit, income, and documentation are still crucial however. The very definition of predatory lending is to lend knowing that the borrower cannot repay, thereby with the intention of acquiring the collateral (otherwise known as "loan to own").

Actual loan sharking is a felony in most states. Cross state lines and it's RICO.

 

[Kenazo]

Jose Theodore of the Montreal Canadians has some family in the business. Ask them. 🙂