There is no such thing as illegally borrowing money from a loan shark. However, you should be cautious when deciding to borrow money from a loan shark, as the interest rates they charge are very high and the terms for collection are strict.
You should also keep in mind that loan sharks generally operate outside of the law. So, how do you avoid being a victim of a loan shark? Here are some useful tips to avoid being cheated by loan sharks.
It’s not illegal to borrow money from a loan shark
It is completely legal to borrow money from loan sharks. This type of illegal lender is not required to offer you a contract or written agreement.
However, they might ask for security such as your bank card, driving licence or passport. You should be wary of borrowers who demand higher interest rates than you can afford. In some cases, they may also threaten to go to court if you fail to pay back the money lent to them. If you have been a victim of this type of person before, you should report them to the police.
The Illegal Money Lending Team (ILLT) is the leading charity working to stop this type of lending. They will assist you in reporting loan sharks and will offer confidential advice.
You may be frightened to contact the organisation, but they understand that reporting a loan shark can be terrifying. They offer a confidential reporting service with one-to-one support. It is important to remember that you are never alone in a situation such as this, and that you should only report the incident to the police if you’re in immediate danger.
Legitimate alternatives to a loan shark
A loan shark is an entity or person who makes loans using aggressive tactics. They often demand higher rates of interest than the law allows, and often force victims to take out multiple loans.
In addition to the inflated rates, they can also increase their interest rates randomly, forcing you to incur an unmanageable debt. As a result, it’s crucial to understand the risks associated with using a loan shark, and find out what the legitimate alternatives are.
The best alternative to a loan shark is to borrow from a regulated lender. A regulated lender must have been authorised by the Financial Conduct Authority (FCA) and offer a fair deal.
Credit unions are another good option. Some credit unions offer debt advice free of charge, which is a great way to avoid getting into debt. And, if you’ve been in debt for a while, you can also seek free debt advice through organisations such as Consumer Credit Counselling and Money Advice Service.
Avoiding giving possessions to a loan shark
Be wary of loan sharks, who often use unregulated lending methods. This can include holding on to personal possessions, including bank cards, and refusing to provide coherent information.
Legitimate lenders will offer you a detailed loan agreement, and should be regulated by the FCA. Look for a register number when speaking with a loan shark. They should also offer to pay the loan in full, but you should always check this information before signing anything.
Avoiding being taken advantage of by a loan shark
Loan sharks are dangerous predators who target unsuspecting people in need of money. Although their origins are largely associated with organized crime, they have become increasingly common in the news and on television.
Fortunately, there are some tips you can follow to avoid falling victim to these predators. Read on for more advice on how to avoid being victimized by a loan shark. Here are tips to help you spot a loan shark and protect yourself.
Never let a loan shark intimidate you. Many loan sharks are unscrupulous, avoiding legal procedures and presenting themselves as friends. They may threaten to tell others about your debt, even if they do not exist.
Look at how the loan request process is being handled, and if it seems strange, call the Financial Conduct Authority. Hopefully, if you come across a loan shark, you will be able to report them anonymously.