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Loan sharks

More information on loan sharks, including how to report one.

What is a loan shark?

A loan shark is a money lender who charges extremely high rates of interest, typically under illegal conditions. They can also use violence and make threats against family members in order to collect money. They rarely use paperwork or leave a paper trail. 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 are loan sharks bad?

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:

  • Pay far more in interest than you would through any legal borrowing and costs can spiral out of control quickly
  • May be harassed if you get behind with your repayments
  • Often pressured into borrowing more money to repay one debt with another

How do I spot a loan shark?

A loan shark may:

  • Offer little or no paperwork, such as a license, credit agreement or record of payments
  • Increase the debt or add additional amounts to it without your permission
  • Refuse to give information, such as the interest rate or how much you still owe
  • Take items as security, such as passports, bank cards or driving licenses
  • Not allow you to settle your debt, or •
  • Get nasty - they may resort to intimidation, threats or violence

How do I check if a lender is licensed?

The Financial Conduct Authority (FCA) keeps details of all licensed lenders, as well as everyone who has applied for a license or has had one taken away or suspended. If a lender isn't listed as having a current license, don't borrow money from them and don't let them come into your home. Check the FCA register to see if a lender is licensed.

How do I report 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.

What alternatives to loan sharks are there?

There are lots of alternatives and options rather than borrowing from an illegal lender:

  • Look into other affordable credit options
  • Consider joining a Credit Union which is a great option for people who may not be able to borrow from a high street bank
  • Talk to us to check if you are receiving all the benefits you are entitled to or use our Benefits Calculator. Email enquiries@salixhomes.org or call 0800 218 2000.
  • A food bank can help if you are struggling to make ends meet, such as Salford Central Foodbank
  • For free and impartial advice you can also contact the Citizens Advice Bureau