Despite the apparent financial assistance that they can provide, people should not be tempted to borrow from a loan shark.
So claims the Trading Standards branch of Cambridgeshire county council which asserts that although they first seem to offer fast money help, opting for a loan from an unscrupulous provider to help supplement spending could leave consumers in even more financial difficulties. As such unlicensed lending providers operate outside of the law, it was stated that borrowers will find that they are not afforded the same level as protection as they would get in taking out a loan by a firm certified under the Consumer Credit Act.
As such it is possible that consumers opting to borrow from loan sharks may find that they develop difficulties not only paying back the loan but also other financial commitments. Such areas could include utility and grocery bills, credit and store cards, mortgages and transport costs.
Mark Oliver, lead officer for Trading Standards at Cambridgeshire county council, said: “Christmas puts a great strain on the family budget, spending a lot on presents and entertaining and as the credit card bills arrive, people may start to feel the effects of missed payments. We all sometimes end up spending far more than we ever meant to but please think carefully about who you borrow money from and the interest rate they will charge you.”
The local authority went on to report that those who make the decision to apply for a loan from an unscrupulous lender could find that they will have to “pay extortionate rates of interest” and may be harassed should they be late in making a repayment. It was also stated that people with problems paying back their loan could discover that they feel pressured into borrowing more money to help cover the costs of repaying their original debt.
And although Trading Standards put forward that loan sharks will sometimes tell borrowers that they will be prosecuted and sent to prison if they do not keep up with loan repayments, the body claimed that this may not actually happen. It stated that as not repaying a loan to an unlicensed lender is not a criminal offense, those borrowing from such providers are not under any legal obligations to make repayments.
Those consumers who believe that they may have dealt with an unlicensed lender were urged to get in touch with Trading Standards as soon as possible. Meanwhile, people looking to organize their finances or for more information were advised by the organization to consult the National Debtline helpline.
People worried that they will be unable to meet various constraints on their spending over the course of 2008 might wish to consider applying for a cheap personal loan from a reputable lender. In taking out this type of loan, borrowers should find that their monthly repayments are much more affordable to make than if they chose to take credit from a loan shark.