Borrowing Money From a Loan Shark Is Never a Good Idea?

First of all, consider what a loan shark actually is. It is an informal or unregulated moneylender, where a short-term loan can be acquired, usually at astronomical rates of interest.

Usually, if you are considering the services of a loan shark, you are in desperate need of money and need it quickly. A loan shark knows this very well and uses this to their advantage by setting their repayments at extremely high rates of interest. No background checks are carried out or collateral secured, and these kinds of money lenders have a reputation of using some very unsavory tactics if loans are defaulted upon. They are known for resorting to blackmail or threats of violence, to enforce repayment, and due to this type of lending body being unofficial and unlicensed, you have no protection. Loan sharks are not legal and operate from outside of the law, giving you no safety net and no alternative options.

If you borrow from a loan shark and cannot make repayments, keep in mind that any threats of violence from their part can be reported. Harassment is breaking the law, so you are well within your legal rights to report them. Contact the police or your local Trading Standards Office for advice on what to do if a loan shark threatens you with violence. Borrowing from an unlicensed money lender is not breaking the law on your part, so do not hesitate to contact police if threatened. You have done nothing illegal and you will not be charged. If you would just like some advice, then contact your local Citizens Advice Bureau or Trading Standards Office on what options you have if you have borrowed from a loan shark, and are not sure if you can make the payments.

If you have not already borrowed, but are considering it, then take a moment to rethink your options. Borrowing from a loan shark may seem like a solution to your problems if you are desperate. Maybe you have defaulted on your mortgage and cannot find the best mortgage loans available to amend this. Maybe your existing mortgage lender won’t offer you a refinance mortgage rate. But going down the loan shark lending path will only cause you major problems down the line. Loan sharks are not interested in what problems you have in repaying back a loan; they are not sympathetic or understanding. If you cannot pay, they will threaten or find other ways to recoup the owed money. Reconsider what the alternatives are, talk to a local Citizens Advice Bureau officer. Find out what legal help is viable or best mortgage loans available for remortgaging, before acting in desperation.

If your income is low and credit poor, you may think that no bank or reputable lender will offer you a loan agreement. However, there are licensed lenders who can still help you, even if you require only a small amount for a short period of time. You may still have to pay a very high rate of interest on your repayments, but you will be protected by law, rather than at the hands of a loan shark. Another alternative is via a credit union. Credit unions help you work out what to borrow based on what you can realistically afford to pay back. The repayment rate is fair and affordable, so you won’t be swamped in debt and unable to repay.