Can A Loan Shark Take You To Court | Dealing With Loan Sharks

No, a loan shark can’t take you or any other borrower to court because the way they have lent you the money is completely illegal. Usually, loan sharks lend money without any paperwork so there is no way they can prove that you have borrowed money from them. In fact, if you refuse to pay the borrowed money then legally a loan shark can’t do anything because not repaying a loan from an unlicensed lender isn’t a criminal offense by law!

Key Takeaways

• A loan shark is a very common term that is used for money lenders who land money illegally with a high-interest rate
• If a lender doesn’t have a license to lend money then he/she is considered a loan shark
• Loan sharks remain very friendly at the beginning but if the borrower misses any payment or doesn’t able to pay the full amount in time they become aggressive and misbehave with the borrower
• You should keep in mind that Loan sharks don’t give loans under Financial Conduct Authority

How Does Loan Shark Illegally Lend Money?

If a lender doesn’t have a license to lend money then he/she is considered a loan shark. There are various ways a loan shark offers a loan. They are – 

1. Loan sharks don’t use any authentic documents to give the loan

2. Don’t share any information regarding the loan

3. If you aren’t able to pay the money in time then they will ask for valuable items of yours in return for the money

4. Loan sharks will keep your property if you don’t pay the money in time

5. Loan sharks offer loans with high-interest rates so the debt never comes down

6. Loan sharks don’t give loans under Financial Conduct Authority

Can A Loan Shark Take You To The High Court?

If you borrow money from a loan shark and now the loan shark is threatening you to take you to the court then don’t be afraid. There is no way a loan shark can take you to the high court. The main reason is, loan sharks are illegal, therefore; they won’t take the risk of taking you to the court. Loan sharks don’t have the desired license to lend money and do not lie under the federal conducting authority. So, they will never take you to the high court.

Federal Law Protection For Loan Sharks

There are some federal laws available that will protect you from loan sharks. You should have some idea about these laws to protect you from illegal money lenders. According to the federal law protection – 

1. The lender is bound to tell the cost of the loan

2. The lender has to disclose the actual finance charge of the loan

3. The allowed interest rate is 2.75 percent per month or 33 percent of annual interest on the loan from 1000$ to 2000$.

4. The lender has to share the annual percentage rate with the borrower

5. The financial institution must have a license to offer a loan

6. Every loan must have some terms and conditions that require approval from the lender as well as the borrower

How To Spot A Loan Shark

Loan sharks have some common characteristics that will help you easily spot a loan shark. They are – 

1. No paperwork

2. Cash loans or bank transfer

3. Don’t share information regarding the loan

4. Takes possessions for security

5. Loan keeps on growing due to high-interest rate

6. Threats of violence 

What To Do If You Owe Money To A Loan Shark

If you owe money to a loan shark then you can seek help from credit counseling agencies. Credit Counseling Agencies can be a great help for you because they provide guidance on the following perspectives – 

1. Debt Management

2. Budgeting

3. Money Management

4. Guidance for debt repayment

5. Consumer credit

6. Avoid Bankruptcy

7. Loan Shark Debt, etc.

These agencies require fees if you want help from them. But, every borrower should take proper counseling from these agencies especially if you have borrowed from loan sharks. These agencies can help the borrower to earn money from licensed parties as well as solve the complexity created by the loan sharks. These agencies take proper legal actions to get rid of the loan sharks and save your money from the loan sharks. Moreover, if you face a financial crisis because of the loan sharks, then these agencies will lend you money from the certified organization or banks.

How To Deal With Loan Shark

If you have taken a loan from a loan shark and now looking for ways to deal with them then you can check the below tips. These tips might help you fight back the harassment from the loan sharks. Let’s check them out.

1. If you receive unsolicited messages from the loan sharks then don’t reply to them. Contacting loan sharks is illegal and it helps them to establish their authority in the modern world.

2. Law and enforcement from every country have a dedicated department to help the loan shark victims. So, don’t hesitate to call the local authority if you think, you are a victim of loan sharks.

3. It’s common for loan sharks to threaten you or your family with violence. So, call the police before loan sharks harm you or your family. IF a loan shark harasses you or your family member then immediately take legal action against them.

4. If you keep paying the loan shark then they will think you are still within their influence. Therefore, you should stop paying the money.

5. If you are a victim of a loan shark then you can also get help from social service agencies.

FAQs About Can A Loan Shark Take You To Court

References:

1. https://bestfinancier.com/can-a-loan-shark-take-you-to-court/
2. https://www.nidirect.gov.uk/articles/dealing-loan-sharks

Last Updated on October 27, 2022 by Magalie D.