Many Hispanics living in the United States have difficulties accessing credit from a bank. If you apply for a loan with a bank, you may be turned down because:

1. You don’t have a credit history in the US yet.
2. You have had financial difficulties in the past and your credit has suffered

If you dream of owning a home, buying a car, or starting your own business, it will be difficult and expensive to achieve these goals without establishing and maintaining strong credit. Because this requires time and good financial practices, many Hispanics find immediate help from a loan shark.

What is a usurer?

When looking for money, you may hear from people you know: “I know this person who lends money and doesn’t even ask for papers.” This “lender” could be a friend of a friend, someone who is a family friend, or could even be in a store in your neighborhood. There are many disadvantages to using the services of a loan shark, although many claim to be legitimate lenders.

• They charge weekly interest rates. What is the real cost of borrowing from a loan shark? The lender will give you a weekly interest rate instead of an annual one. Remember that bank loans and other financial institutions always use annual interest. Let’s look at a typical case: The lender gives you $1,000 and you agree to pay 5% weekly interest on this amount. 5% each week translates to about 20% each month, and if you multiply that by 12 months in the year, you have an annual interest rate of 260%!
• Payments are confusing: Weekly interest rates that don’t seem that high can translate to up to 10, 20, and 30 times more interest than what you’d pay on a traditional loan agreement.
• The loans are difficult to repay. In fact, they are designed to be almost impossible to pay. Many people who have borrowed from these lenders end up losing more than they originally invested. If you can’t pay, the lender may constantly harass you or even threaten violence. Many people who borrow money from loan sharks lose their businesses.
• They do not report to the credit bureaus: Loan sharks sometimes do not report their loans to the credit bureaus. To establish, protect, and maintain your credit history, you must make sure that your creditors report your loans to the credit bureaus. If they don’t, there is no official record of your loan payments.
• They do not operate within the regulations: If you have a complaint, you have nowhere to go because loan sharks do not have to comply with the regulations put in place to protect you as a consumer.

In general, it is best to avoid these types of lenders at all costs. If you need money for your business or for an emergency and you don’t have access to a bank loan, try getting loans with ACCION, a nonprofit organization that makes business and personal loans and reports to the three major credit bureaus. .