Shylock, for those of you who aren’t familiar with Shakespeare’s play The Merchant of Venice, was a moneylender who charges one of the main characters (Antonio, the merchant of the title) in the drama one of the most outrageous penalties for defaulting on a loan: the terms of the loan which was voluntarily signed and agreed to by Antonio allowed Shylock to cut a pound of flesh off Antonio… without anaesthetics, which hadn’t been invented when Shakespeare was writing, unless you count very strong alcohol or opium. And you can guess what happens: Antonio defaults on the loan when he gets the news that one of his trading ships has been wrecked at sea, and Shylock hauls him into court with a knife ready to do the business, and it takes some very cunning legal work by Portia, the heroine of the play who disguises herself as a man so she can act as a lawyer, to get Antonio off the hook.
Shylock was the Renaissance version of a loan-shark: someone who charges a very high rate of interest so people with bad credit ratings can take out a loan. Loan sharks although you won’t hear them advertising themselves this way are now more common and more acceptable to society than they used to be (only just). In Shakespeare’s day and before that, the practice of charging very high interest rates was known as usury and it was considered to be among the most atrocious of moral crimes. Dante, who wrote before Shakespeare, in his classic Inferno, put usurers (we’d call them loan sharks) in the seventh circle of Hell at the same moral level as murderers and perverts.
And if you’ve ever talked to anyone who has taken out a loan with a loan shark, you’ll understand why society in days gone by cast them as villains. Some people who have failed to read the fine print and/or have felt so desperate that they’ve taken out a loan from one of these unscrupulous lenders would agree completely and are likely to consider hacking off half a kilo of muscle to be a better situation than watching their family suffer in an attempt to pay the loan off.
You should always be suspicious about people or companies who offer loans on very easy terms. It is highly likely that there will be exorbitant hidden charges and/or penalties. These people are often considered by people who haven’t got a stellar credit history. How can you avoid Shylocks but still get the money you need to buy a set of wheels (so you can get to your job so you can earn the money to pay off the loan and still have something left over to live on)? Is there a way?
The first thing to do is to look at your credit history carefully. Sometimes, the printouts can be wrong or out of date. A debt may be in dispute or you may have already paid it off, and this isn’t shown on the bit of paper. If you can sort this out and clarify what’s going on, then you may be able to clear your name on the credit front.
The next thing you can try doing if you do have outstanding debts or unpaid bills that are damaging your credit rating is to do what you can to pay them off. This may mean that you have to trim your lifestyle back a bit cut that credit card up if you find that you can’t help yourself running up big bills with it!
If the problem is well and truly in the past perhaps the bad rating is a legacy of being young and stupid many years ago then having the paperwork, such as bank statements and budgets can be used to show lenders that you have learned how to manage your money properly and you are unlikely to default on a loan again. Another possibility is to save up and have a large deposit handy, which not only means that you’re borrowing less but also shows the lender that you’re able to save money.
And, most obvious of all, try applying to a different lender. If you’ve always gone to the same lending organisation and they know that you have a tendency to get yourself into problems, then a new lender might be more favourable towards you, especially if you take some of the other steps listed above. Talk to us and we’ll help you find a new lender that suits your situation and we’ll help you with the fine print so you don’t end up paying a pound of flesh.