Sometimes, when you need money desperately, you resort to making decisions that can have an incredibly negative impact on your finances, as well as your health and wellbeing. Loan sharks prey on vulnerable people who feel like they have no alternative but to borrow money from illegal lenders. The terms of agreements are often unmanageable, and it’s very common for people to find themselves in situations where debts spiral out of control. If you’ve borrowed money from a loan shark, and you’re having problems, hopefully, this guide will point you in the right direction.
What is a loan shark?
A loan shark is an illegal lender. Loan sharks tend to target those on low incomes with poor credit ratings, and they offer rates that are far higher than those provided by approved, regulated lenders. People often turn to loan sharks when they feel like there is no other way out, for example, when they have no money coming in, they risk losing their home, and they have debts they can’t afford to cover. Loan sharks often use charm and persuasive language to lure people in and make that person feel like they’re really doing them a favour. The trouble with loan sharks is that they can turn very quickly, and even if you do manage to keep up with repayments, you’ll be paying extortionate fees. A loan for a few hundred pounds can spiral into a debt of thousands due to soaring interest fees and penalties. Loan sharks can also be intimidating, and they may employ aggressive tactics if you fall behind with payments. If you’re unsure whether a lender is legal or not, check whether they are listed on the Financial Conduct Authority Services Register. You can do this online. If that individual is not registered, avoid borrowing money, and contact the police.
What to do if you’ve borrowed money from an illegal lender
If you’ve borrowed from an illegal lender, try not to panic. The first step to take is to report the individual to the police. This is particularly important if you have been threatened, or you find yourself in a situation where you can’t pay money back. As well as going to the police, you can also report loan sharks to the government’s Illegal Money Lending Team. You can do this online, and you can maintain anonymity. If you are reporting the case to the police, it’s wise to keep a record of any aggressive or violent behaviour, and any instances of harassment, for example, phone calls, text messages and unexpected home visits. The evidence you have could help to ensure that the individual in question is punished accordingly.
It’s very common for people who have borrowed money from a loan shark to feel anxious or scared about approaching the police or reporting illegal lenders to a financial authority. It’s understandable to feel like this, but try and ignore threats, and remember that there are people who will be able to help you. Loan sharks are illegal, and there are measures in place to protect you. Nobody should have to live in fear of opening the door or answering their phone.
Safer alternatives to consider
Often, people resort to borrowing money from illegal lenders because they feel like they have no other options. While it may not always be possible to take out a loan if you’re in debt, or you have a very low credit score, there are alternatives. Loan sharks may provide a solution, but they do so at a very high price. Before you do anything, investigate bad credit loans, look into borrowing from a credit union, and find out if you’re eligible for financial support from the government by means of credits or benefits. Free financial advice is available, and you may be surprised to find out that there are other avenues open to you. If you’re in debt, and you’re struggling, you can also seek free guidance from debt charities. You might feel like you’re alone, but you’re not, and the sooner you reach out, the better.
If you’ve found yourself in a position where you’re being threatened by a loan shark, there is a way out. You don’t have to resign yourself to a lifetime of debt or put up with aggressive phone calls and verbal abuse. Loan sharks are illegal. If you’ve been approached by somebody you believe to be an unlawful lender, or you’ve borrowed a sum of money from a loan shark, and you’re worried, get in touch with the police or the relevant financial authorities as soon as possible.