- An individual or entity that provides loans with extremely high interest rates. Loan sharks are used as a lender of last resort, so to speak, for individuals with bad credit who cannot find loans elsewhere and are often linked to criminal organizations that will use the threat of force to ensure repayment. Although the term "loan shark" is often used to refer to criminal lending practices, it is also used colloquially to refer to institutions that use predatory lending practices that are not necessarily fraudulent, including lenders that provide payday and title loans. Canada's Criminal Code limits usurious lending practices and prohibits the charging of interest rates above 60% per year.
Related Terms and Acronyms
- Bad Credit — Definition,
- Someone who carries a higher credit risk.
- Bad Credit Loan — Definition,
- A loan taken out by someone with bad credit.
- Consumer Credit — Definition,
- Loans for personal use as opposed to business or commercial lending. These loans are typically unsecured and not backed by collateral.
- Payday Loan — Definition,
- A short-term loan with an extremely high interest rate.
- Predatory Lending (PL) — Acronym, Important,
- Lending practices that are unfair, deceptive or fraudulent.
- Secured Loan — Definition,
- Borrowed money that is backed by collateral.
- Title Loan — Definition,
- A loan that uses a car as collateral.
- Unsecured Loan — Definition,
- An advance of money that is not secured by collateral.
- Usurious Rate — Definition,
- An interest rate that is unnecessarily high or well above legal rates. For example, sometimes intangible property taxes are applied to income from usurious rates.
- Usury — Definition,
- Illegal, excessive interest.