What if you're low on cash, need money, and are out of options? If a classmate offers to put you in touch with an individual who makes loans, be very careful about accepting the offer. You could be meeting with a "loan shark" who specializes in college students.
Loan sharks are difficult to identify. According to the FBI, there are many types of loan sharks and they come from all walks of life. Their only goal is to make money-usually using a no-default loan. This is how it works:
Loan sharks give you cash and you agree to repay it, plus interest, over a set period. (None of this will be in writing.) For example, if you borrow $1,000, you'll repay around $130 a week for 10 weeks—a 30% interest rate! If you can't come up with $130 one week, you'll still owe the interest ($30) for that week, and another $130 payment another week. There's no defaulting on this kind of loan; you must continue payments until the $1,000 is repaid.