Too good to be true – ‘money lenders’

Geshy Singh

I have come across plenty of complaints on legal advice Facebook pages and money blogs regarding unscrupulous money lenders that make borrowing money seem so simple yet the price to pay in many ways sadly isn’t worth the risk.

Remember if you do not qualify for a loan at a registered official institute or bank, then it means you have no or little affordability or you are credit listed. In essence that means you are putting your own financial well-being at peril. Don’t get into debt to pay off debt… you will be setting yourself up for your own debt trap!

It’s so frustrating when I come across chancers from out-of-town advertising to our Estcourt locals, promising them a loan even if they are blacklisted. Even if they have an Financial Service Provider (FSP) number contact the Financial Services Board to verify it. It’s probably bogus.

They normally charge an upfront fee disguised as an ‘admin’ fee and then when it comes to paying out the actual loan, you do not hear from them again. Not only should you stay away from them; you have the ethical responsibility of reporting them to the authorities.

Also be weary of loan sharks. Some are legal and some are illegal but all are mostly unethical. The registered loan sharks normally charge interest at ridiculously high rates. Also their repayment term is generally extremely short making it difficult for borrowers to pay back the loan in time. Illegal lenders generally withhold title deeds, log books and your Identity Document, etc as surety and can resort to methods of violence and/or illegally attaching your valuables should you be unable to pay.

Don’t make an impulsive decision just because it alleviates the immediate stress and pressure because the long term consequence is never worth it at the end. Down scale your living expenses or negotiate with your creditors to arrange for alternate payment arrangements and make the necessary personal sacrifices to alleviate debt but at all costs, avoid those dodgy lenders.