What is a loan shark?

A loan shark is a person or entity that lends money to borrowers at extremely high interest rates, often on terms that are too difficult for the borrower to afford. Loan sharks typically operate outside of the law and charge usurious rates in order to make a profit. They frequently target those who are in desperate need of money and may not be able to access other forms of credit. In Washington, state law regulates debt collection, including loan sharks. The Washington Department of Financial Institutions (DFI) is responsible for enforcing laws against loansharking, as well as other forms of debt collection. It is illegal to charge more than 12 percent interest on Consumer Loans in the state of Washington. Loan sharks often charge rates much higher than this amount. Loan sharks can also be dangerous, as they may resort to threats or violence to convince borrowers to repay their loans or interest. In addition, they often use extreme tactics to collect their funds. It is important to remember that loan sharks are not motivated by altruism, but are instead looking to make a profit by lending money at high rates to the desperate and needy. It is best to avoid loan sharks at all costs, and turn to legitimate and legal sources of credit when seeking such funds. Borrowers should always check rates and fees associated with any loan before agreeing to any terms, and should seek legal advice if they enter into a contract with a loan shark.

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