If you’re struggling with money, you may think that a loan shark is your only option, but it’s not. Please don't be tempted to use them!
Once you start using a loan shark, they’re very difficult to get rid of. They can cause a lot of extra stress and worry, and won’t solve your money troubles.
How to tell if it’s a loan shark
There are some tell tales signs that the person trying to lend you money is a loan shark. These include:
• There is no credit agreement. They will usually just tell you ‘you owe me this much today’
• They’re likely to use threats, violence or intimidation
• They probably won’t give you a receipt or a payment book
• They might take valuables, like a cash card or jewellery, before lending you money
• They’ll lend to under 18s
• There are high charges if you don’t pay
If you’ve borrowed money from a loan shark, you're not legally required to pay it back. Loan sharks sometimes scare people by saying that they can be prosecuted, but this isn’t true.
Borrowing safely
Before taking out any sort of loan, make sure you have a written agreement laying out all the important details. This includes how much money you’re borrowing, what you have to pay back, and the date the payment is due.
Always make sure you know how much interest you’ll be expected to pay, as well any penalty charges you'll have to pay if you fall behind with repayments.
Generally, if you borrow £100 over 12 months from a credit union, and you repay regularly every week, the total you’ll pay back is £128.95.
But a loan shark can charge whatever they like. Average rates are 825%. This means if you borrow £100 over 12 months, the total amount you’ll need to pay back is £925!
To find out about credit unions near you, visit www.findyourcreditunion.co.uk
If you have any suspicions about someone who offers you a loan, no matter how small, report it to: reportaloanshark@stoploansharks.gov.uk or call 0300 555 2222