Loan sharks are illegal lenders who often target low income and desperate families. They may seem friendly at first but borrowing from them is never a good idea – even if your credit rating is poor or you only need a small amount for a short while.
Why loan sharks are bad
Some loan sharks have attempted to charge interest rates as high as 719,000%
Source: BBC news story
Loan sharks will start out being friendly. And if you keep up your repayments, they will stay that way. But the reality is, even if you do, any money you borrow will come at a high price.
There are many risks attached to borrowing from a loan shark.
You pay far more in interest than you would through any legal borrowing. One woman who borrowed £500 ended up repaying £88,000
You may be harassed if you get behind with your repayments
You are often pressured into borrowing more money to repay one debt with another
How to spot a loan shark
A loan shark may:
Reporting a loan shark
If you have been approached by someone you think is a loan shark, you need to report them and contact the police if you are in immediate danger.
Alternatives to loan sharks
If your income is low, you have a poor credit rating or you only need a small amount for a short while, there are still reputable lenders you can turn to instead of loan sharks.
If you’re on a low income or you need to improve your credit rating and you need to borrow a small amount for a short time, look into borrowing from a credit union. You will generally have to join first and some credit unions may ask you to save a small amount before you can borrow.
Contact us to discuss your local Credit Union – Plough and Share