Poor choice of loan can be a problem not only for several years but also for a lifetime. That is why it is a good idea to think about it in all aspects. Unfortunately, there are still many people who can not tell and use not only different dubious societies, but also different dubious individuals. A perfect example is a loan from a usurer. Today it is the worst thing you can come across on the financial market. How it looks? What is dangerous and why do people still look for it? We’ll find out together.
Why is loan from usurer dangerous?
The usury is illegal in the Czech Republic and this in itself clearly indicates that such a loan from a usurer will not be the best that exists on the market. The risk is mainly related to interest, which is definitely not small. If you do not mind that with classic non-banking companies you can completely overpay the entire amount borrowed if you make a bad choice, so with a usurer count on it that you will probably overpay it several times. Therefore, there is no question of any advantage, even minimal.
Furthermore, a loan from a usurer may also be characterized by the fact that nothing is exceptional in terms of danger when quite severe repayment conditions are established. Here we can include:
- High penalties for any delay
- Hard law enforcement
- Necessity to sign different documents
It can be seen that whoever takes the loan, life can change rapidly – of course for the worse. Yet there are people who actively seek it and want it. Why? We will look at some of the reasons together.
Possibility of fast processing
Yes, the loan from the usurer is indeed linked to the fact that it can offer a quick settlement. It’s just that you meet that person, write down the necessary documents – most often a bill of exchange, and you immediately get money. Of course, many people need this, especially when they find themselves in a difficult financial situation that they have gone so far as to need money in hours. We can say that the usurer becomes the only option for them. This is not to say that this is the right option.
Get money without complicated screening
The second reason why people look for loan loaners and why they take them is related to the characteristics of the applicants. Usually these are people who have not been lent by banks or non-banking companies, nor have they found a solution in the P2P loan segment. They will address usurers by offering them the opportunity to raise money without complicated screening. It is often not necessary to:
- Proof of income
- Detect registry entries
- Provide additional information on creditworthiness
The people in question belong to a group of problematic people that no fair and responsible institution lends. Yet they want or need money and usury becomes the only way out for them. But very disadvantageous, which rarely leaves the debt trap.
The usurers’ offers are usually associated with many attractions. They offer loans in thousands and millions, offer quick settlement today, as well as attract the possibility to choose the due date of their choice. And many people will not resist, as the offer may seem better to them than traditional providers. The first impression may be positive, but all the benefits end there. And once you find out how much interest is and how much you actually pay as extra applicants. Suddenly you can see that each of these attractions is paid hard for you.
Minimum financial literacy
Many surveys and surveys show that the financial literacy of Czechs is increasing, but that it is still not at a high level. And that’s the big problem. Many people do not even know that a loan from a usurer is bad, or they cannot calculate how badly it is. They just need to be interested in the loan offer and because they do not have the knowledge, experience and often no comparison, they nod to it. At that moment, they are only a small step away from literally astronomical problems that may arise because of their nod to the worst loan of all.
How to recognize loans from usurers?
We have mapped their dangers, we have mapped out why people are taking them, so it remains to look at how to recognize such a loan. We have already indicated it above. Usually, such a loan is characterized by:
- Quick processing
- Significant benevolence
- Wide range of amounts
These are similar features to fraudulent loans, from which it is also good to take your hands away. So when you see similar offers, don’t respond to them and keep looking. This is a fair provider from both the banking and non-banking and P2P segments.
Unlike moneylenders, fair providers have a traceable history as well as various ratings. Often usurpers do not even find their name, as it may be fake. No website or presentation can be talked about. Of course, they have no offices and headquarters and you handle everything with them somewhere on the street. These are also signs that the person who gives you money is none other than a usurer. You will usually recognize him by not writing any contract with him, as the guarantee for the loan will take the form of a bill of exchange. This is mainly because he has power over you in her hand, as well as because the bill of exchange cannot tell you what interest the person has borrowed from you, and prosecution would be very complicated.
Where to Find the Right Loans?
Don’t you want a loan from a usurer to be the one you accidentally take? Then look for the right places. Ideal are online loan comparators that bring together only proven and fair providers. In addition, you will also see a number of important information about the characteristics of the loan, profitability and conditions of acquisition.