A standard plot device is some poor slob borrowing money from a loan shark and then running for his life because he can’t repay. My question is why would anyone lend this person money, even at exorbitant interest rates, when he has no prospect of ever repaying?
Suppose I was a criminal type with a lot of cash and no compunction about “taking care” of people who default. I lend someone $20,000 and expect to be repaid $25,000 on Friday. He doesn’t pay. I have him taken care of. Net result – I lose $20,000.
I know criminals aren’t necessarily the brainiest people in the world but they could surely figure out that that is a bad deal for them. Sure, the rates they charge make a little more risk acceptable, but you still wouldn’t lend large amounts to someone unless he had some prospect of being able to repay. Just because your client is really, really scared (motivated?) doesn’t mean his ability to get ahold of cash is improved.
So – is this just Hollywood? Or do loan sharks really lend large sums to two-time losers?
“non sunt multiplicanda entia praeter necessitatem”
– William of Ockham