Money Wellness
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calendar icon16 May 2024

Over 3 million people turned to loan sharks in the last year

More than three million people borrowed money from loan sharks in the last 12 months.

Almost one in 12 UK adults said they turned to an illegal lender over the last year, research from Creditspring has revealed.

Of these, one in six said they had no other option after being refused credit by regulated lenders.

One third (31%) of people said they now feel stuck with no way of improving their financial situation, while a fifth (19%) said they turned to an illegal lender to cover the cost of everyday expenses like food and household bills. 

A sixth (15%) said they needed the loan to pay their rent or mortgage.

The wild west of illegal lending

Illegal lending carries many risks, such as further financial difficulties or even violence.

One in seven people (15%) said the interest originally agreed had increased over time while 14% have been threatened with physical violence.

The same proportion (15%) said they didn’t know how they’d repay the loan shark, with many likely to have to borrow more to cover their existing debts.

It’s important to remember that you’ve not broken the law if you’ve borrowed from a loan shark, but they have. As an unauthorised lender, they have no legal right to make you pay the loan back.

No affordable short-term credit options

Creditspring says more people are turning to loan sharks to get by because of a lack of affordable short-term credit options.

Over a quarter (27%) of people say they turned to a high-cost credit lender this year after being rejected by mainstream lenders.

The research also shows that younger people are more than twice as likely to seek out a loan shark than the older generation. 

In the last 12 months, 13% of 18–34-year-olds said they borrowed from unregulated lenders, compared to 5% of 35-54-year-olds and just 1% of over 55s.

A bleak reality for millions of people

Neil Kadagathur, Creditspring CEO, says the cost-of-living crisis has destroyed people’s finances, adding a growing reliance on “the wild west” of illegal lending is “the starkest indicator yet of just how bleak the financial reality is for millions of people.”

He explained:

“Illegal lenders thrive on the desperation of borrowers who have exhausted all their mainstream options and are left with nowhere else to turn.

“These predatory lenders often offer extortionate interest rates and additional fees which borrowers have little choice but to accept – if an illegal lender whacks on an unexpected charge, there is no formal complaints process to support borrowers. Plus, there are the horror stories of the hidden costs of illegal lending that can go even further than a financial punishment. 

“The need for greater access for responsible, short-term credit lending has never been clearer.”

Report a loan shark

If you believe someone is a loan shark, or you have borrowed from one, seek help as soon as possible – loan sharks don’t go away. 

Contact the police on 999 if you’re in immediate danger.

You can also report a loan shark anonymously to the Illegal Money Lending Team either online -, by text 07860 022 116 or phone 0300 555 2222.

Further information about loan sharks, including safer alternatives for borrowing money, is available on our website:

Loan sharks – everything you need to know (

Six red flags that suggest you’re dealing with a loan shark (

Avatar of Rebecca Routledge

Rebecca Routledge

A qualified journalist for over 15 years with a background in financial services. Rebecca is Money Wellness’s consumer champion, helping you improve your financial wellbeing by providing information on everything from income maximisation to budgeting and saving tips.

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