If you are considering going to a loan shark in Cork, think again! These loan sharks charge up to 188% interest on the cost of the original loan and those are just the ones that operate on a legal basis.
As the recession close in on people so do the moneylenders. They are licensed by the Central Bank to charge anywhere between 23 to 188% interest on the cost of the loan. The largest licensed moneylender in the country is Provident Personal Credit, which expanded its client base from 75,000 to 88,000 last year.
It is easy to get sucked into the process, with doorstep credit and a minimum of paperwork required. For an average 500 Euro loan you will have to pay 650 back. They will arrive at your door every week for collection of a weekly payment to pay off the loan. The agents who collect the loan work on a commission basis, which gives them incentive to collect the money.
However, the real problem lies with unlicensed moneylenders, who can charge what interest rates they like. They do not provide payment slips, which leaves no evidence of what the borrower has already paid. They often can put a lot of pressure on the borrower to come up with the money. Even if the loan is nearly paid back the borrower will be offered fresh funds, to try and keep the vicious cycle going.
There is no doubt that no matter how much debt you are in, loan sharks are not the answer. It will lead you into a spiral of debt that it can be hard to escape from.
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