A loan shark is a person or business that charges a higher interest rate for loans than is allowed by law. Maximum interest rates are typically set at the state level, so an entity is considered a loan shark if it lends above the legal interest rate in the state in which it does business. An example of such predatory lending terms would be lending $1,000 and then requiring a repayment of $1,500 within 60 days.
Loan sharks use threats of various kinds to obtain repayment. Threats can include spreading rumors about the borrower, damage to one’s property, or threats of physical harm.