Payment method #2 that loan sharks use when you need personal money loan from them
Before you ever go borrowing personal money loan from those loan sharks, you must understand the payment methods that use. Now I will explain about the second and the most dangerous method, which I will refer to as "continuous method". To put it much more simpler, continuous payment is a method where you keep paying for only the interest of your personal money loan, until you are able to pay back the total amount in full.
It may look simple and easy enough, but please do not get fooled by its presence and simplicity. If the amount borrowed is large, it could easily destroy your lives. Let's say for example, you are in need of cash because you are over five months in your rental payments. So you go looking for personal money loans that offer you cash loan for tennets. You find a few suitable cash loan companies, but they are all loan shark types. They offer you a $4000 loan where you need to pay only $400 for the interest every month.
At first glance, it doesn't seem like much of a problem since you are earning....let's say $2000 a month. It looks and feels like everything is well under control, paying $400 a month from your $2000 salary seems like a harmless enough threat. But then after paying the interest for a few months without any incidents happening, you finally realize your situation.
You have been paying the interest for five months now, a total of $2000, but the total of your debt has not decreased. You have to pay a direct $4000 to settle the tennant cash loan companies. After deducting your salary for expenditures of the interest, rentals, food, transportation and those little extra, you are left with little over $400 at the end of each month. And since you will need to pay your cash tennant loan in full, it will take a minimum of ten months before you can even accumulate that sum.
You keep saving but then an emergency happens and you need to use that money. You have to start all over again to collect the amount. And before you know it, you have been paying for interest that has now exceeded the amount you had initially borrowed, but your debt has not even decreased by even a single dollar! This is the hidden danger from this payment method that many people has fallen into.
In the example above, I mentioned cash loan for tennets, but in real life, every single type of personal money loan can create this situations, not just the tennant cash loan companies. So unless you are 100% sure that you will be able to accumulate that amount, or that you will receive that much money, never borrow loans that uses this continuous payment method.
In the example above, the person had an income of $2000, yet to pay for the $4000 loan, it took up to one year, and more than $4000 in interest alone. In reality, this is quite a small sum, and the interest rate is considered low. There are also some areas where the interest rates are calculated in days and weeks instead of months. In Japan, most loan sharks use a period of only ten days. That means you will need to pay the interest rate for every ten days! And not too many people can afford to pay it!
That is the real danger of this method. Now that you understand about what they are as well as the payment methods that they use, you will be better equipped to go to the next section to learn how to detect those loan sharks that disguise themselves on the Internet. Please remember that these interest rates and payback period does not only apply to cash loan for tennets, but every single type of personal money loan. Please return to the previous page to find out more.
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Did you know that there are two payment methods?
Many people do not really understand the payment methods for those legal and illegal loans. By understanding the two and their differences, we will be able to choose the suitable one for us, as well as which ones we must avoid at all cost.
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