The practice of lending money to desperate people at unfairly high interest rates. More specifically, loan sharking involves charging interest rates as high as 30% annually or even more. People who need money badly may accept to pay extremely high rates of interest. Loan sharking is, in most markets, illegal and can be criminalized. Prey to loan sharks include single parents, gamblers, illegal immigrants, the elderly, white-collar executives, etc. For example, a loan shark would lend $5,000 to some borrower with the stipulation that the loan’s principal will be repaid along with an interest amount of $4,000 within one month.
December 9, 2024
