Anyone can be a victim of a loan shark – your family, friends, neighbours and even you. It’s not always easy to spot a loan shark as they come in all shapes and sizes and will at first appear friendly, just part of the community. It is when you can’t pay that they will turn on you.
A loan shark is someone who loans cash as an unauthorised business.
If someone is struggling to pay a debt the loan shark will resort to threats, violence and intimidation to get what they think you owe, even if the debt has been paid off several times over. A loan shark will typically have little paperwork and will add penalty charges for late payments. Sometimes they will add random sums to the bill.
Many victims keep paying because they think they can afford the agreed weekly sum, but they don’t realise how much their continuing weekly payments add up to – or they are too afraid to stop payments.
You should avoid loan sharks. They do not provide a community service. They are simply out to make money.
- Are running an unauthorised business under
- Often refuse to tell the borrower how much they still owe, or when they will finish repayments.
- Often increase the debt or add additional amounts
- May take items as security, including passports, bank cards and driving licences
- May resort to violence, threats and intimidation.
As a whole, South Africans struggle with debt, with large numbers of the population either in debt or under debt review. With the rising costs of living – particularly with hikes in the cost of food, water and electricity – many people are not able to manage their debt and turn to loans to get themselves out of a tight corner. Start investigating other options. And as uncomfortable as it may be, ask family and friends if they would be willing to help you first. Should this not be a viable option, start doing some research with registered credit providers or financial institutions.