This article will give you information on what loan sharks are and how to spot loan sharks.
Loan sharks are illegal money lenders, with no lending licence, who will loan you money and who often target desperate people.
Why are loan sharks bad?
Loan sharks will seem friendly at the beginning and will continue to do so as long as you keep up with your repayments. However they charge extremely high interest rates to deliberately make it difficult for you to keep up the repayments and you could easily end up owing them at least five times the amount you borrowed. On top of this, if you don’t repay them they will use violence or intimidation to collect the debts.
How to spot a loan shark
Often, these people won’t advertise themselves as money lenders, they may be introduced to you through a friend of a friend or they may even overhear you chatting in the pub and offer to lend you the money. They will come across as friendly but beware of the consequences. They won’t give you any paperwork, a fixed interest rate or any receipts of repayments and if you fall behind with your payments then you may experience some form of violence against you. You will end up paying back more than you can imagine. They may even take your personal belongings for security such as your passports, bank cards or driving licences.
Avoid loan sharks at all costs. If you need additional financial support then come to the Student Finance Centre. We have hardship funds and short-term interest-free emergency loans available depending on your circumstances.
If you know of any unlicensed lenders or you have been approached by one then report them – they are breaking the law. See the Report Loan Shark website or call the helpline – +44(0)300 555 2222. If you have already taken out a loan, remember you are not breaking the law, they are, so visit the above or come and see us at the Student Finance Centre.