If you have financial difficulties and a less-than-perfect credit score, you may feel desperate and powerless. That’s why you may want to reach out to an unlicensed moneylender that offers you an attractive sum of money quickly and with no apparent strings attached.
However, you should avoid loan sharks even if you feel like there’s no one to turn to. In this article, you’ll find out the dangers of unlicensed moneylending as well as better solutions for your problems.
Don’t compromise your safety! Read the article below.
Reasons to Avoid Unlicensed Moneylenders
If you’re reading this, you already suspect that unlicensed moneylending is not a good way to go. You can easily recognize loan sharks because they don’t require any paperwork. They’ll also agree to loan you money by phone instead of through the right channels.
Here’s why you should steer clear of them:
You Never Know Where You Stand
Unlicensed money lenders won’t give you any info on them or their business. They won’t be clear about your interest rate or your instalment scheme so that you can make a repayment plan that works for you.
Besides, you never know how much you owe them in the end.
Loan Sharks Take Your ID
It’s a frequent practice among unlicensed moneylenders to take your ID, including your driving licence or passport. The only way to get your ID back is to pay them what you ask, and you never know how much that is.
Keep in mind that it’s illegal to give other people your ID. Besides, you need your ID in case the police stops you or you have a medical emergency.
Unlicensed Moneylenders Increase Your Debt Without Reason
You can wake up with extra charges, hidden fees, and an increased debt without knowing. Loan sharks operate outside the law, which means they can change these things as they please.
The consequence is that you’re often unable to repay the loan shark so that you need to request loan extensions. In turn, that leads to a spiral of increased instalments and uncertainty.
As you have no legal means to dispute loan sharks, you may also reach out to another loan shark out of desperation to get your money back. In the long-term, that only leads to more legal and financial issues.
Unlicensed Money Lenders Are Dangerous
They can pester you with e-mails and text messages, they can threaten you and your family, and they can also stalk you. Loan sharks can show up at your doorstep or your work out of the blue. They can cause a scene or even hit you.
Remember that unlicensed moneylenders can stoop to very low levels because they’re not scared about the law too much.
Loan sharks are dangerous even after you pay them back because they can extort you and your family.
6 Ways to Get Fast And Convenient Cash
Now you got a glimpse of what loan sharks can do to you. Don’t be fooled by their shiny promises because you’ll be going down a spiral of danger for years to come.
If you feel like there’s no solution to your problems, we’re here to help. Here are some better ways to get the sum you need seamlessly and safely:
1. Personal Loans
Personal loans are convenient and safe because you get access to the money you need with limited conditions.
However, you may not be eligible for this option. You may have already tried to submit for a personal loan and your application was rejected. This fact leaves you more vulnerable to reach out to a loan shark.
That’s why it’s important to apply for the right type of personal loan and increase your chances of getting it:
- Consider a low-income loan if you have a small paycheck. Discuss this option at your bank and see what conditions apply. You may need to take a guarantor and borrow a smaller sum of money, but at least this option is safe. You should also discuss the possibility of longer tenure with lower interest rates to ensure you can repay your loan.
- Consider a personal loan for people in civil service. Some financing institutions have specially-crafted financing solutions for you. For instance, we at Intime Advance can offer you customized loans and very low interest rates.
- Consider a secured personal loan. If you don’t have a good credit score or you need a bigger sum of money, you can guarantee with collateral. You can also ask one of your friends or family members to become a guarantor so that you can access the money you need.
2. Credit Card Cash Instalment Plan
Your credit card might have this instalment plan available. That way, you will transform your credit limit into a loan, which comes with a well-established repayment plan. The disadvantage is that you can borrow a smaller amount than with a personal loan because you’re confined by your credit limit.
Credit Card Installment Plans offer you several advantages, though:
- The interest rates are low enough so that you can repay this loan. You can expect fees around 15% to 18% per year, although your bank might offer occasional attractive discounts. It’s wise to reach out to your bank before deciding this so that you can benefit from these promotional rates.
- It’s easy to apply. Banks have different application processes. However, most of them allow you to submit your application online or on the phone.
- You get cash quickly. You can get money transferred into your account within the next 24 or 48 hours. However, if you need emergency money now, you can get an ATM cash advance with your credit card. The downside here is that this advance is more expensive than the credit card instalment plan.
3. Ask Your Friends or Family
This solution comes with several advantages, such as:
- Getting a safe loan from someone you trust
- Small or no interest rates
- More flexibility in repaying the loan
However, your friends and family might not have the necessary amount or may not be willing to lend you money. You might also want to avoid letting your close relatives know your financial situation or you might be too proud to ask for their help.
Borrowing money from people that are close to you might also cause unnecessary tensions and dramas. Still, keep in mind this solution is a million times better than a loan shark.
4. EPF Withdrawal
EPF withdrawals are cheap, affordable, and safe. You can access EPF only in some situations, though, such as:
- Redeeming your home loan
- Paying for medical costs
- Paying your study tuition
- Making investments
- The rites of Hajj in Mecca
The biggest advantage of EPF withdrawals is that you won’t have to pay any interest. The downside is that you can lose your dividend earnings, which get up to 6% or more every year.
So, when considering a personal loan vs. EPF, weigh the total cost of your funds to see what saves you more money.
5. Cash-Out Refinancing
Cash-out refinancing means taking a second loan on your house. As you have paid a part of your first loan, your house has increased in value. Therefore, you can get more money once you get a second mortgage.
The problem is that you need to have owned your property for long enough so that its value could increase. The biggest risk is that you can lose your house if you can’t stick to your repayment scheme.
However, you can expect several advantages:
- Low interest rates. You only have to pay around 4.6% per year, give or take. Remember that personal loans have interest rates of about 7.5% per year, whereas licensed moneylenders practice rates of 12-18% per year.
- A bigger sum. If your home is worth a lot of money and you don’t have a big mortgage, you can get more money than through a personal loan.
6. Licensed Money Lenders
This option is best if you:
- Need more money than your EPF or credit card limit allows.
- Have already tried getting a personal loan from a bank.
- Can’t ask your friends and family.
- Can’t do cash-out refinancing.
Licensed moneylenders like us at Intime Advance offer you several benefits:
- We offer you convenient interest rates. Licensed moneylenders are regulated by law so that we cannot ask you more than an 18% interest per year.
- We offer you transparency and safety. Unlike loan sharks that can harass you to get their money back, we operate within the limits of the law.
- We come up with customized plans. All our loans are personalized to suit your needs and we offer you plenty of loan options to choose from.
- We don’t care as much about your credit score as banks do. We value your honesty and your ability to repay the money more than other facts.
Top tip: Check if someone is a licensed money lender or not on the KPKT website.
Unlicensed moneylenders are extremely dangerous and you should always avoid them. Besides, you should always contact the authorities if you’ve been tricked by a loan shark.
Keep in mind there are always better ways to go. This article showed you six great solutions to solve your financial problems. And, if you still feel the world is against you, give us a call at Intime Advance. We’ll do our best to find a solution together.