What it is:
Loan sharking refers to predatory lending practices by individuals or organizations that charge high interest rates.
How it works (Example):
Loan sharking involves taking advantage of the borrower's weak credit or collateral condition. Typically, when a borrower has no to secure a traditional bank loan, a loan shark does not usually require collateral for a loan, a bank account or even a written loan agreement. While this may sound good, at first, a loan shark will charge very high interest on the loan, which makes it very difficult to pay the loan back on time, or at all.