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%.


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.

  1. Shark Watcher

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

    Interest that taxpayers pay on personal and consumer loans. Personal ...
  3. Rule of 78

    The Rule of 78 is a method used by some lenders for calculating ...
  4. Locked-In Interest Rate

    Referring to a loan where the borrower and lender agree on a ...
  5. Whole Loan

    A whole loan is a single loan that a lender has issued to a borrower. ...
  6. Term Loan

    A loan from a bank for a specific amount that has a specified ...
Related Articles
  1. 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.
  2. Investing

    Shark Speak: The Most Common "Shark Tank" Terms

    Want to talk like a Shark? These are the top terms you need to know.
  3. Small Business

    3 Shark Tank Failures That Made Millions

    Learn how some of the most successful companies rejected on the TV show "Shark Tank" left the show with no funding and still made millions.
  4. Personal Finance

    Personal Loans vs. Car Loans

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

    How To Apply For a Personal Loan

    Learn about different avenues for applying for a personal loan, and learn valuable tips to help you get your personal loan application approved.
  6. Insights

    Forces Behind Interest Rates

    Get a deeper understanding of the importance of interest rates and what makes them change.
  7. 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.
  8. Tech

    Good Credit? Try This Credit Card Alternative

    Personal loans are a credit card alternative to try if you've got great credit and you want to lock in a lower interest rate on what you borrow. [underlined word is credit card alternative]
  9. Personal Finance

    Home Improvement Loans: What Are Your Best Options?

    If you plan on taking out a home improvement loan, you should know what your options are and which ones might be best for your situation.
  10. Personal Finance

    Lending From A Loan Officer's Perspective

    Learn how a loan officer thinks, so that you can get the best and safest loan.
Trading Center