Loan Sharks: Loans from Hell

Newcastle, UK, 5 July 2009. In times of economic turmoil, loan sharks can have a field day – but the costs for borrowers can be much higher than the exorbitant interest rates charged. This article is provided by Yes Debt Free – a UK based website spreading awareness against loan sharks. [br]

Newcastle, UK, 5 July 2009. In times of economic turmoil, loan sharks can have a field day – but the costs for borrowers can be much higher than the exorbitant interest rates charged. This article is provided by Yes Debt Free – a UK based website spreading awareness against loan sharks. [br]

There are times when we desperately need a loan. But what if you do not qualify for a decent loan from a high street bank or a specialist lender? And what if someone turns at your door and offers you a loan immediately without any paperwork and at slightly higher interest rate? Won’t he become an angel to you?

Beware – he may be a loan shark and this may be a trap. 200,000 Britons are already at risk and the number is growing very fast. Don’t get yourself counted in this.

Who are loan sharks?

They are illegal moneylenders. They are not licensed under the Consumer Credit Act and they lend money at an astronomical interest rate (even 117,000%). These loan sharks normally prey on people with poor credit rating, low income or those who have been refused a regular loan. [br]

The Loan Trap

1. They charge very high interest rates and you may find it difficult to keep up with the repayments
2. You may be forced to get a second loan to pay off the first, and so on and so on until your debts go out of control.
3. They are happy if you pay the interest alone. Soon you will find that you have paid much more than the initial amount as interest
4. They turn very nasty if you fall behind payment schedule

Don’t Believe it? Read these Recent Reports:

1. Women in the North East are being forced into prostitution to pay back spiralling debts to loan sharks. Source: BBC
2. Paul Nicholson is a loan shark who raped, blackmailed and threatened the debtors for repayment. He trapped vulnerable people in a spiral of debt by charging extortionate interest rates and sexually intimidated women, just so he could maintain his lavish lifestyle. Source: Times Online
3. Ian Jenkins is a loan shark who preyed on alcoholics and drug addicts by charging interest rates of eight million per cent. He took the Post Office benefit cards and pin codes of 55 homeless victims to get their repayments plus extortionate premiums directly from their accounts. Source: Mirror UK
4. For more shocking stories, do a Google or Yahoo news search.

Why they are Growing so Fast?

This is not a new problem. But at present they are growing very fast as there is a credit crunch in the market and high street banks have stopped riskier lending. To add to this, over the past few years many specialist lenders, such as London Scottish and Cattles, have withdrawn from the market.

Alternatives to Loan Sharking

Never go to loan sharks. There are better alternatives to loan sharks like Sub prime lending, Credit Unions, Council banks/Municipal Banks, Doorstep lending. You can easily find them in your locality.

Fight Against Loan Sharks

If you find a loan shark or if you have fallen in the trap, report to “Stop Loan Sharks” team (UK residents only):