Loan Sharks & Debt

All professional debt advisers say the same thing when it comes to loan sharks. If possible, don't deal with them. Loan sharks are lenders without a licence, and are therefore unbound by any guidelines or legislation beyond common law. The idea of a creditor as threatening, scary and perhaps violent comes from the practices of some loan sharks.

Can loan sharks break the law?

Getting in debt with a loan shark is a very bad idea, but loan sharks are of course bound by the same laws that bind the average person. However, loan sharks are not regulated by the Office of Fair Trading or any other official body, and do not have to follow their codes of practice.

What can go wrong with a loan shark loan?

Loan shark loans can include loans with very high rates of interest, with very unfair terms. Furthermore, borrowers may be pressured heavily to repay money by borrowing more money.

How do I know if my lender is a loan shark?

Lenders with an OFT licence are listed in the Consumer Credit Public Register, and this includes lenders who have had these licences stripped from them. The register is a great source of free information.

What if I have borrowed from a loan shark?

If you have borrowed from a loan shark and are having trouble repaying the debt, contact your local Trading Standards Office at once and seek their help in dealing with the loan shark. Trading standards employ illegal money lending teams and there are even charities such as stop loan sharks and shark bait.

Legally, do I have to repay a debt from a loan shark?

Although the loan shark may say otherwise, there is not legal right for them to recover a debt. Remember, any lender who harasses you is breaking the law, no matter how far you are in debt.

I need money but have a low income and bad credit?

Some licensed lenders may consider lending to you even if your income is low or your credit rating is bad. Other routes of borrowing money can include credit unions, family or friends.