What is a loan shark?
The loan shark is an individual or organization that lends money for extraordinary high rates usually at a legal interest rate. Historically, sharks of loans are associated with organized crime and promoted for the violent tactics they use to support repayment. Sharks for today's loans include organizations, often referred to as predatory creditors who charge high interest rates for personal loans, mortgages and car loans. The creditors offered credit based on future salaries and chattel, also called collateral. Shark loans proposed to prosper its rental program by maintaining its debtors in permanent debt. The debtors rarely managed to repay the principal and in some cases the creditors were able to re -pass the Chattel to secure the loan.
In 1917, several states in the United States were adopted by a unified small loan Act to enforce consumer protection and created a group of creditors, which elimPrivised the need for a shark loan. Uniform laws on small loan and its subsequent changes helped in the elimination of sharks of entrepreneurship loans. In the 1930s he filled the organized crime of an empty niche and began lending money to people who could not get it with normal channels due to low salary or poor loan.
Mafia Loan Sharks, notorious for their violent tactics, originally offered loans for paycheck. Over time, the mafia moved away from payday loans and began lending to small and medium -sized enterprises, criminal operations and players. Dave loans in the United States in the 1970s have disappeared, but can be found in many other countries.
Currently, the term credit shark includes an institution of predatory loans, such as sub-prime creditors. Fraud creditors offer mortgages to home owners who lack the necessary deposit, have a bad loan or do not meet other requirementstypical creditors. The creditors are legal before the primate, but lend money for the highest possible legal rate. The appearance and popularity of creditors with the subject is often accused of leading to a congress authorized banking rescue assistance in the United States in 2008.
Other forms of predatory loans include loans for title loans, some car loans, some loans to improve home and paycheck loans. Companies that offer these services use shady sales tactics, including high -pressure sales, hidden fees and confusing contractual language. In addition, they take care of low -income people and use their wishes and dreams by persuading them to buy things they can't afford.