Loan sharks: know the signs

Lesson 11 of 12 in our free Borrowing guide: a 5-minute money game with the key points below.

Shown for England. Some rules here are different in Scotland, Wales and Northern Ireland: the lesson shows your nation's version.

This lesson is in the full version.

Free with a code from your uni, college, council, landlord or employer (worth £600/year). Lesson 1 of Borrowing is free for everyone.

Questions you'll answer

Mo's friend borrowed from a loan shark and is scared. What's the best first step?

Red flag: “Guaranteed loan, no credit check!!” — No legit lender can guarantee approval — they must check affordability.
Red flag: “Need £300? I can sort it tonight.” — Cash tonight from a stranger in your DMs. Legal lenders are FCA-authorised and check you can afford it first.
Red flag: “Just pay a £50 admin fee first” — Upfront fees before you get the money = classic scam or illegal lender.
Red flag: “and send a pic of your ID + bank card.” — Taking ID or bank cards as 'security' is a loan shark hallmark.
Red flag: “Nothing in writing, keep it between us” — No paperwork and secrecy — legit lenders give you a written agreement.
Gives you a written credit agreement with the total repayable → Legit. Required for regulated credit.
The amount you owe keeps rising for no clear reason → Loan shark. Random extra charges are a classic sign of illegal lending.
Is on the FCA register → Legit. You can check any lender on the FCA's Financial Services Register.
Threatens you or your family when you're late → Loan shark. Never acceptable. Get help — this is a crime against you.