As your parents age, it’s only natural to become more protective. This definitely holds true in regards to their finances, as you don’t want them to be taken advantage of.

Unfortunately, there are people out there who prey on the elderly. They realize they’re no longer as sharp as they once were, and are more likely to make poor financial decisions.

While you can’t be everywhere at all times, there are many steps you can take to protect your parents from loan sharks and predatory lending as a whole.

1. Educate Them

There’s a good chance your parents are still living in the past, not exactly realizing that there are people out to make a dollar off of them.

Do your part in educating them about loan sharks, predatory lending, and any other scams that could impact their finances.

The more information you provide the better off everyone will be.

2. Review Everything

You don’t want to come across as controlling, but let your parents know you’re willing to review every financial move they make (within reason, of course).

For example, before they secure a loan, help review lenders and terms to ensure that it’s a legitimate deal from a reputable lender.

3. Discuss Options

There may come a time when your parents feel cornered. They need money, and are willing to fall prey to a loan shark in order to get it.

You should explain that there are many financial options to consider, ranging from credit cards to personal loans among others.

There’s never a good time for anyone to feel that they have to do business with a loan shark.

It’s a scary world out there, especially when it comes to money. If you want to protect your parents from loan sharks and predatory lending, the three tips above should help you do just that.

Despite the disadvantages when compared to other forms of credit, there will always be people who turn their attention to a payday loan when they need money.

While there is nothing wrong with considering all your financial options, especially when searching for a loan, it’s important to do so with a clear mind. Without this, you could find yourself making an uninformed decision that costs you more money and adds stress to your life.

Here are the three primary reasons why there will always be people who use payday loans:

• Simply put, it doesn’t take long to secure a payday loan. In fact, with a few minutes of time on your side, you can complete the necessary paperwork and obtain the money you need. This alone is reason enough for some people to go down this path.
• Borrowers are always looking to do whatever is easiest on them. And with a payday loan, convenience is the name of the game. You can visit a local storefront or find a lender online. From there, it once again comes down to speed. There’s not a lot of paperwork and there is no waiting around.
• Few requirements. With a bank loan or credit card, there are a number of requirements you need to meet in order to qualify. With a payday loan, this isn’t the case. Generally speaking, as long as you have a job you’ll qualify.

So, what’s the problem with securing a payday loan? Despite these perceived benefits, you need to understand that there are some serious pitfalls.

At the top of the list is the cost of a payday loan. Here’s what the Consumer Financial Protection Bureau has to say about this:

“Many state laws set a maximum amount for payday loan fees ranging from $10 to $30 for every $100 borrowed. A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. By comparison, APRs on credit cards can range from about 12 percent to about 30 percent. In many states that permit payday lending, the cost of the loan, fees, and the maximum loan amount are capped.”

Even though you can find some benefits of a payday loan, the high cost should be enough to point you in another direction.

Do you have any experience with this type of loan?

As you take on more and more debt, you can be rest assured that your financial situation will change in many ways.

Mounting debt has a way of making you vulnerable to poor decisions. Subsequently, as you make these decisions, your situation worsens and the cycle continues.

Here’s an example. You continue to use credit cards to get through each month, despite the fact that you understand the negative impact it’s having on your finances.

At some point you realize that your credit cards are maxed out, thus leading you to explore other avenues for keeping your head above water.

For some, this means one thing: searching for any type of loan that allows them to get their hands on more money.

Since traditional lenders are likely to shoot you down, as a result of your current debt load, you find yourself considering loan sharks and payday lenders.

Your vulnerability during this time makes you believe there’s nothing wrong with this decision, as you need the money to live.

Unfortunately, going down this path is only going to make your situation worse. Here’s why:

• A loan shark will only lend you money with a high interest rate attached to it
• You’re not doing anything to improve your situation, but instead making it worse by taking on another loan
• Once you use the money you’ve borrowed, you’ll find yourself once again searching for more (this is a cycle you need to break)

You’re not the only person who is facing mounting debt and all the stress that comes along with it.

While it’s easy to take on more debt as a means of holding things together for a little bit longer, this approach will eventually catch up to you.

You may be vulnerable during this time, but that doesn’t mean you should continue to make poor financial decisions. Once you put your foot down, you’ll be surprised to find that there are many legitimate strategies for clawing your way out of debt and better enjoying your life.

You’ve heard the horror stories in the past. You may have personally gone down the wrong path with a credit card at some point.

There are people who will tell you that a credit card is the best financial tool they have. There are others who will tell you that using one of these has made their life more difficult.

While there are definite pros and cons associated with credit cards, here’s something to remember: it’s always a better option than turning to a loan shark.

With a credit card, you associate yourself with a legitimate bank that is governed by a high level of standards, rules, and regulations. Conversely, loan sharks don’t worry about these things. Instead, their only goal is to lend you money as a means of generating a profit.

Here are some of the many reasons why it makes sense to use a credit card, as opposed to doing business with a loan shark:

• Variety of options. There are hundreds of credit card issuers and thousands of credit card offers. With so many options it’s much easier to find something that suits your exact wants and needs.
• Access to a zero percent introductory rate. With a balance transfer credit card, for example, you can access a zero percent introductory rate for a period of up to 18 months. This allows you to take care of your financial troubles with no concerns of mounting interest charges. A loan shark will never offer this rate, but instead charge you 20 percent or more in order to borrow money.
• Top of the line customer service. With a credit card you gain access to a customer service team that’s willing to answer your questions and help you get the most out of your situation. The same can’t be said for a loan shark, as this “lender” only cares about you paying them back with interest.

This isn’t to say that using a credit card is the best option for every consumer, but it always beats a loan shark.

Do you have any experience using a credit card to tackle a financial challenge? Were you happy with the end result?