What Is a Loan Shark?

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent, and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or network providers. Read more about our Editorial Guidelines and How We Make Money.
Loan Shark Definition
Are Predatory Lenders and Loan Sharks the Same Thing?
How Does a Loan Shark Work?
Example of a Loan Shark
A private lender who threatens violence to collect a debt A predatory lender who charges excessive rates of interest An organized crime boss who makes or finances extortionate extensions of credit
Is Working With a Loan Shark Bad?
Can Loan Sharks Threaten You?
Tips for Spotting a Loan Shark
Check for Lender’s License
Check for Financial Disclosures
Check Lender Underwriting Standards
Tips for Avoiding a Loan Shark
Borrow From Legitimate Lenders
Seek Loan Preapproval
Shop Around for Financing
Alternatives to Borrowing from a Loan Shark
Personal Loans
Credit Cards
Family Loans
Personal Savings
The Takeaway
Frequently Asked Questions
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About the Author
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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