Why is it a bad idea to borrow from a loan shark?
There are many risks with borrowing money from a loan shark. They include:
- A high and often unmanageable interest rate. Loan sharks charge much higher interest than a high street lender would charge you
- Being harassed or threatened if you fall behind on payments
- Coming under pressure to borrow even more money to repay your original loan. Doing this gives the loan shark more ‘power’ over you, and makes you more vulnerable to intimidation and violence
When you first meet them, loan sharks will usually seem friendly and understanding to your problems. They do this to gain your trust and make you more likely to borrow money from them. They may even behave nicely after a period of intimidating behaviour, to keep you off balance and ‘train’ you to stay on top of your repayments.
What can I do about a loan shark debt?
If you've borrowed money from a loan shark, the most important things to remember are:
- You've not done anything illegal and you won't get in trouble with the police. It's illegal to lend money without a licence, but it' not illegal to borrow money from a loan shark
- You don't have to pay the money back. If the money was lent illegally, the loan shark has no legal right to collect it and they can't take you to court to get it back
- Don't stop paying a loan shark if you're worried about your safety. Get advice from a specialist before you make a decision
If you're worried about a loan shark, confidential help is available from specialist illegal money lending teams who investigate and prosecute illegal lenders.