Is a loan shark charging very high interest rates illegal and what should I do if I am being threatened?
Illegal lending is a criminal offence in most countries. You have the right to protection and support, and your debt to a loan shark is not legally enforceable.
Last reviewed: 1 June 2026
Explanation
Illegal moneylending — loan sharking — involves lending money at extremely high and unregulated interest rates, often with threats or intimidation to enforce repayment. In most countries, any money lent by an unlicensed lender is legally unenforceable, meaning you do not have a legal obligation to repay it. Loan sharks exploit vulnerable people with no access to regulated credit and then use fear of violence, property damage, or exposure to keep victims compliant. You are not in legal trouble for borrowing from an unregulated lender — the lender is the one committing an offence. Specialist illegal lending teams exist in many police forces, and organisations such as the England Illegal Money Lending Team (UK) or equivalent bodies in other countries offer confidential support and protection.
Common red flags
- Lender has no licence or registration number
- Interest rate is not clearly stated or is impossibly high
- Threats or intimidation used to collect repayments
- Lender holds your bank card, benefits book, or ID documents
- Debt appears to grow despite regular payments
What to do now
- Contact your national illegal lending reporting line in confidence
- Know that a debt to an unlicensed lender is legally unenforceable
- Seek support from a debt charity or citizens advice service
- Contact police if you are being threatened or harmed
Frequently asked questions
Will I get into trouble for reporting a loan shark?
No. Reporting illegal lending is protected, and authorities recognise that borrowers are victims. Specialist teams focus exclusively on prosecuting the lender.