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London, UK, February 11, 2022 McapMediaWire Loan sharks have no positive reputation among people and are always linked to serious crimes. In this line, crimes that occurred under unknown circumstances have moneylenders or loan sharks on their lists of people to investigate. However, money lenders can also operate legally. According to the definition, lenders lend money while the other party pays the sum and the interest. These interests are a dangerous area since most money lenders cross the line and turn into loan sharks. On the other hand, when they operate legally, there are no issues of interest since they are regulated by law. Here are some pros and cons of borrowing money from lenders.

Who are the money lenders?

There is a considerable difference between loan sharks and money lenders. Namely, money lenders are authorized by the Financial Conduct Authority (FCA) to be able to lend money legally. Loan sharks, on the other hand, are not registered with the FCA and lend money from home with very high rates and interest, without giving you any paperwork on the arranged deal. Loan sharks are known to have a lot of customers and they lend money as a kind of business. The problems start once the recovery period begins. They tend to recover the loaned money using certain methods such as threats, violence, blackmail and confiscation of your valuables and credit cards. There are extreme cases where they forced non-payers into prostitution and selling drugs.

Money lenders and banks?

Legally approved lenders are able to provide six times your monthly income, while banks can provide ten times your monthly income. You should keep in mind that banks will require you to have at least $20,000 per year and a good credit history. As for the speed of approval in this pawnshop vs bank battle, the point goes to the money lenders. Namely, money lenders can release money within 30 minutes, or during the same day, when the application is fulfilled. and hopefully with the documentation. Speed ​​is the result of many factors. First, money lenders do not require collateral, which is otherwise mandatory to take out a loan from the bank. Loan sharks lend you unsecured loans, but the little money they can pay you prevents you from falling into bigger debts.

Interest rate

This is one of the most important factors when it comes to lending money, especially from lenders. This is because of the previously mentioned loan sharks who tend to raise interest rates and thus aggravate your debt even further. However, there are regulations for legally licensed money lenders. Officially, lenders can charge you an interest rate of 1-4%, but this rate depends on the lender. Therefore, comparing interest rates and offers from banks and other lenders can help you find the best option. However, it is extremely important to ensure that the lender you obtain a loan from is legal and FCA certified.


When comparing with banks, it is important to say that banks have a long list of eligibility and requirements and this is due to the fact that they can lend a huge amount of money. On the other hand, legal money lenders will ask you for some documents helping them to establish the most important information about income, employment and identity. Once this information has been established, your loan will be granted to you, for less than an hour, or during the day. Some of the mandatory information includes at least 21 years old, NRIC card, any letters recently sent to your address (electricity, bills, etc.) and certain other documents that may be required by a lender. While banks require full-time employment, work certificate, NRIC photocopy, 2-year notice of assessment, 3-month computerized payslips, at least $20,000 annual income, etc. If you receive a larger sum from the bank, then they will probably ask you for collateral or hard money loans. This means that you will be able to offset the money taken with the asset, or your collateral will pay your loan, whereas money lenders are not allowed to lend any of these loans.

In sum, it is very important to emphasize that there is a considerable difference between loan sharks and legal loan sharks Whereas loan sharks can use some of the very violent methods to recover money or even bring entire families to commit criminal acts, loan sharks are legally restricted and are allowed to lend small amounts of money that will not push people into more debt.

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