Have you seen the Filipino TV series On the Wings of Love? There was a scene there when a man went to Clark’s (portrayed by James Reid) apartment and demanded for money. Threats were even made in case Clark is unable to pay on time.
Believe it or not, that scene happens in real life, especially in the lives of OFWs. Difficult times and immediate need for money will lead migrant workers to people known as loan sharks to be able to send money back in the Philippines or finance certain expenses.
The good news is you can avoid that – and save yourself from stress and harassment. Who are Loan Sharks?
Loan sharks can be a person or entity that allows you to borrow a certain amount of money and charge with higher interest rate, usually above established legal rates. They are also illegal financing companies that usually targets people who are in desperate need of money.
Apparently, sky-high interest rate is just one thing you have to deal with. When you borrow money, say P10,000, you can’t get the entire amount. Interest rates are already deducted at the beginning of the transaction. If you are unable to pay on time, loan sharks often harass you through blackmail, intimidation, and threats.
How to Deal with Loan Sharks
Let’s say you are really in need of cash and loan sharks are your best option at that moment. Here are tips on how to deal with them:
- Try your best to repay them as soon as you can. It is still your responsibility to pay what you owe and at the same time, save you from their harassment and threats.
- Know your rights not just as a consumer but also as a person – and make sure you let them loan sharks know that you are aware of such rights.
- Seek help from authorities in case you or your family’s well-being is being affected.
Tips to Avoid Borrowing from Loan Sharks
Thankfully, there are ways available to help you avoid dealing with loan sharks. Here’s what you can do:
- Always set a budget for everything – your daily expenses, money to be sent to the Philippines, and savings – and make sure to stick to it.
- Try your best to save. You will never know what will happen and in case of emergencies, you have something to use for you or your family.
- If borrowing money is needed, check the licensed and reputable lenders near you, compare their rates and payment terms, and determine which of them is more helpful.
- Consider borrowing from a credit union or closest friends – and make sure you pay them back as soon as you can.
- Encourage your family to save instead of spending. Set up a savings account and make sure the funds in it will only be used for emergency purposes.
- Grow your money through various investment channels. It can be time deposit, UITF, mutual fund, or stock market.
The bottom line is with proper money management, you will have enough for the rainy days in case something happens.