DEFINITION of 'Loan Shark'

A person or entity that charges borrowers interest above an established legal rate. Depending on where a person lives, lenders typically cannot charge more than 60% interest per annum. A loan shark, then, would be someone who illegally charged interest over the state's legal limit, which could range up to, or even over, 100%.

BREAKING DOWN 'Loan Shark'

For example, a loan shark would lend $10,000 to a person with the provision that they be repaid $20,000 within 30 days.

A big word of caution is that loan sharks will often back their lendings with threats of violence or damage to a person's reputation as a way to ensure the loans are repaid. If you find yourself in a position of owing to a loan shark, make sure you talk to a financial (and maybe a legal) professional to help you get out of the situation.

RELATED TERMS
  1. Shark Repellent

    Slang term for any one of a number of measures taken by a company ...
  2. Shark Watcher

    A firm specializing in the early detection of takeovers. The ...
  3. Personal Interest

    Interest that taxpayers pay on personal and consumer loans. Personal ...
  4. Loan

    The act of giving money, property or other material goods to ...
  5. Locked-In Interest Rate

    Referring to a loan where the borrower and lender agree on a ...
  6. Lender

    Someone who makes funds available to another with the expectation ...
Related Articles
  1. Managing Wealth

    Is it Time to Take Your Company to Shark Tank?

    Understand the key factors an entrepreneur should consider when thinking about whether it might be time to try to go to "Shark Tank."
  2. Investing

    5 Things Investors Can Learn From Shark Tank

    Retail investors can watch "Shark Tank" to learn how the wealthy analyze investment opportunities.
  3. Small Business

    8 Most Successful Products from Shark Tank

    With its eighth, 5 million viewers, some studs and a whole lot of duds, we take a look at the 10 most successful products to come out of ABC's Shark Tank.
  4. Insights

    How Is a Business Valued on "Shark Tank?"

    How entrepreneurs and the Sharks value a business likely takes into account present value, future value, the value of companies similar to it and risk.
  5. Small Business

    Should I Apply to 'Shark Tank' or 'The Profit'?

    In this article, we'll help you determine whether or not your business can benefit from appearing on Shark Tank and The Profit.
  6. Managing Wealth

    When Are Personal Loans a Good Idea?

    You never want to borrow money for frivolous reasons, but these five circumstances might warrant it.
  7. Personal Finance

    Personal Loans vs. Car Loans

    How to tell whether a personal loan or a car loan is better for you.
  8. Personal Finance

    Personal Loans: To Lend Or Not To Lend?

    Attempting to help a loved one with a cash loan can put a strain on your relationship - and your bank account.
  9. Insights

    How to Get Your Idea Featured on Shark Tank

    The opportunity to present a business idea to the cast on Shark Tank hinges on some good fortune, a marketable product and a well-organized plan.
  10. Personal Finance

    Using Shows Like Shark Tank to Teach Kids About Money

    Shows like Shark Tank offer a good opportunity to talk with children about money, helping them gain the knowledge they need to make smart money decisions.
RELATED FAQS
  1. Are secured personal loans better than unsecured loans?

    Read about the differences between secured loans and unsecured loans and how they are used. Learn about forms of collateral ... Read Answer >>
  2. How can I use the correlation coefficient to predict returns in the stock market?

    Read about simple interest loans, how they function, and some of the loan products or contracts that are most likely to carry ... Read Answer >>
Trading Center