Put Loan Sharks on the Naughty list this Christmas

I think we can all agree that Christmas is one of the most expensive times of the year. With lockdown and restrictions a thing of the past, this could be one of the most expensive festive seasons yet. Get ready for bigger festive functions, lots more food and double the number of presents to buy.

Because of these factors making Christmas a particularly pricey time of year, you may consider taking out a loan. Loans Sharks know this and might use it to their advantage to target people that they think are likely to want to borrow money…

What is a loan shark?

Loan sharks are a type of illegal money-lender. They operate in many ways, from going door-to-door, meeting a stranger in the pub or even an old friend offering to lend you some money.

This type of borrowing might seem simple and easy – it cuts out the faff of credit checks and applying online right? But in reality, these loan sharks are criminals and any deal made with them can turn nasty.

Here’s some reason why you should NEVER borrow from a loan shark:

• There is no paperwork or contracts which record how much you have borrowed or how much you have repaid. At the end of the day, it’s your word against theirs.
• If something goes wrong or you are unable to repay, these criminals may threaten you with violence or intimidation.
• They often charge very high interest rates, which can be changed at any time as they are not fixed.
• Your payments could be helping to fund organised crime.

How to avoid loan sharks

Any legal lender will be registered with the Financial Conduct Authority (FCA). To make sure the person you are borrowing from is legit, check the FCA’s register. If you know of anyone lending illegally you can report them here.

Why borrowing with your credit union may be the best option

Credit unions are a great option for borrowing. Your local CU will often have much lower rates and costs than a regular high street bank or credit card… and, perhaps most importantly, we are legal and regulated and authorised by the FCA!

At London Mutual, we work in the interest of benefitting our members by:

• Offering reasonable rates on our loan products, with no hidden fees
• Having a straight-froward application process and manual analysis of each application
• Taking an applicants situation into consideration when making a loan decision
• Helping to build your savings, improve your credit score and encourage good financial habits
• Only doing soft checks to ensure your credit score is not at risk

Proof is in the (Christmas) pudding:

Comparisons based on borrowing a personal loan of £500 and repaying over 4 months.