Be careful when choosing where to acquire credit, especially when it comes to unauthorized lenders. In the Philippines, the most common unauthorized lenders are loan sharks. They provide fast cash, but in exchange, borrowers suffer from excessively high interest rates of up to 20% or more and in many cases would have to surrender their ATM card linked to their payroll account as collateral. More often than not, loan sharks do not provide a formal contract or any records of the borrowers’ loan arrangement, which can lead to more debt. Loan sharks are also known to use intimidating methods to collect debt, including violence.
Acquiring a loan from loan sharks is definitely a risk and comes with many strings attached. Remember to consider your safety and protection and your ability to pay when choosing a lender.