Payday lender or loan shark: Is there really a difference?
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CLEVELAND, Ohio (6/2018) — The term “loan shark” might bring to mind a scene in a movie where a gangster takes a crowbar to the kneecap of a down-on-his-luck gambler who can’t make good on repayment of a loan.
The term “payday lender” might bring to mind an image of a legitimate business, complete with a bright green sign, that offers loans at extremely high interest rates targeted at people with low incomes or who would otherwise not qualify for traditional financing.
Are LOAN SHARKS and PAYDAY LENDERS the same?
The answer: Sort of.
Historically, a “loan shark” describes a lender that charges very high rates, Anne Fleming, an associate law professor at Georgetown University, said in an email.
MUSINGS FROM DIANE:
Why do some people feel it necessary to make their money by bullying others who cannot afford to give up even one dollar? Payday lenders (now some of our larger banks have entered this world) are in the business for one reason only – to make a “killing” offering loans to desperate people. The end result is these people can rarely pay off the loan and end up filing bankruptcy or, in the case of registration or title loans, losing their vehicles. Is there room for a reasonable interest on short term loans – absolutely!! But, let’s not force people into bankruptcy or to lose their jobs just because they need a loan for a few weeks or months.
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