If you are looking for an inexpensive loan, you will quickly find it. The providers literally roll over with advertisements. These can be found on websites on the Internet as well as in the mailbox as advertising slots. But what about the apparently cheap offers? Are dubious credit providers behind the willing granting of a loan to so-called borderline cases or are there just as serious offers? How can you re cognize dubious and reputable loan offers? This article will tell you everything you need to know about the loan shark!
Interpreting lure offers correctly: How to unmask dubious credit providers
Not every tempting loan offer has to come from a loan shark. Many banks advertise favorable interest rates for the repayment of a loan and other favorable conditions. A loan shark is characterized by the fact that its offer is actually pursuing something different than it is being faked. Anyone who has an entry with credit record , is unemployed or has only a low income will find it difficult to obtain a conventional loan. Promises made by loan sharks often seem just right in such situations.
How can you recognize dubious credit providers?
A loan shark directs its offer from the outset to a specific group of users. Untrustworthy credit providers often make offers that oblige the borrower to ultimately pay outrageously high usury interest or unforeseen additional costs. The interest rate is often close to or above the permitted standards.
In addition to taking advantage of the unfavorable location, other things can be added, such as offers that are not serious. Behind these are also borderline intentions such as the transfer of a high commission payment before the loan is paid out to the loan shark or similar things. It can also happen that after paying a high down payment, the loan is only brokered. In this case, it is up to the current credit company, which does not even have to be a member of BaFin, to determine whether a credit contract actually comes about under the specified conditions.
How to spot a dubious loan shark offer:
- excessive interest rates
- unfavorable contract costs
- High commission payments before the loan is paid out
- Due dates of fees before conclusion of contract
- Credit is only possible in connection with other contracts such as building society contracts or insurance
- Lender does not have a banking license from BaFin (Federal Financial Supervisory Authority)
What if you fell victim to a loan shark, what are your options?
Contracts may not be concluded in Germany solely on the basis of contract components that have been specially created. Contracts are subject to the statutory provisions of the German Civil Code (BGB). The closed credit contract is invalid when claiming immoral interest. According to current case law, there is an interest usury if the interest rate discount requested by the lender is twice as high as the usual loan costs on the market. In times of low interest rate policy, the limit of the permitted value can already be reached at an interest rate of 12 or 13 percent. However, the applicant’s personal situation must also be taken into account. If the credit record is negative, the interest rate can be slightly higher.
Anything above the calculated market value is considered usury. You can inquire at the house bank as to how high market interest rates are. At the usual interest rate, the Federal Court of Justice (BGH) assumes what would be required from a bank for a comparable loan with the same term. Claiming excessive interest is illegal. Such contracts are ‘against good morals’. A loan contract that includes the payment of useless interest rates is simply invalid.
Report loan shark to the consumer advice center
Interest rate usury is subject to the provisions of the Criminal Code (StGB). According to Section 291 Paragraph 1 No. 2 of the Criminal Code, the exploitation of a contracting party’s inexperience is punished with a prison sentence of up to three years or a fine for one’s own benefit. However, borrowers should always independently make comparisons to similar offers before signing a contract and only sign a loan contract after they have been checked.
If in doubt, going to the consumer center will help. This can also help those already cheated to find a way out of immoral gag contracts. In addition to some helpful information, addresses of specialist lawyers are also assigned, which can assist consumers in the event of a contract being terminated. When a criminal complaint is threatened, dishonest credit providers often give up on their own. This is especially true if they are offered a prison sentence of several years or a large fine.