Posted on 30 June 2022
When facing serious financial difficulty, pay day lenders or loan sharks can seem very appealing. Loan sharks are unregulated, illegal lenders who offer money with little or no paperwork, at extremely high interest. Stories about loan shark lending often involve threats of violence or worse.
Advice and advocacy team leader Katie Ford explains: “The cost of living crisis means more and more people are likely to turn to loan sharks, especially those with poor credit ratings, who can’t turn to more mainstream lenders like the banks. Loan sharks are also targeting people online, and although it may start off friendly, things can quickly turn sour.
It goes without saying that loan sharks should be avoided no matter what.
“Buy now, pay later” schemes are also on the rise and are largely unregulated. It’s very easy to buy anything from a sofa to a new TV and pay for it over months or years. Although spreading the cost might sound attractive, being locked into long term payment plans, while juggling other debts, is not a good idea.
What’s the alternative?
If you need a loan to stay afloat, we advise considering speaking to a credit union. These are regulated, not for profit institutions offering lower cost loans. They can often help when a bank won’t lend you money. Search for your local credit union online, and apply directly to them. You’ll certainly find a much better deal than with the sharks.
If you’re worried about your finances, and feel that very soon you’ll no longer be able to pay your rent, we encourage you to get in touch as soon as possible. There are many things we can do to help. For example, we’ve got lots of information on our website about where to find a helping hand.
What if I already owe money to a loan shark?
Stop Loan Sharks is a team of experts offering intervention, support and education. They can help if you owe money to a loan shark, if you’re worried about someone else, or if you want to report a loan shark. Anyone can contact them confidentially by calling 0300 555 2222, or through its website.
This story is part of our Helping Hand initiative.