If you owe money to a loan shark, you are not alone and you have options. This page explains what to do first, where to get confidential help, and how to report an illegal lender. It also lists trusted organizations that can help with debt, bills, and financial hardship.
If you are in immediate danger
If you or your family are being threatened with violence right now, call 911 or your local emergency number. Threatening or intimidating a borrower is a crime. It does not matter that the loan was informal or illegal, and it does not matter that you agreed to the terms.
What to do if you owe a loan shark
- Do not take another illegal loan to cover the payments. Borrowing from a second loan shark to pay the first is the fastest way to make the situation worse.
- Start keeping records. Write down what you borrowed, every payment you have made, and every message, call, or visit from the lender. Save texts and voicemails. This protects you if you report the lender or need legal help.
- Know where you stand legally. In many U.S. states, a loan made by an unlicensed lender at an illegal interest rate is partly or wholly unenforceable, which means the lender may have no legal right to collect it through the courts. State laws differ, so get advice about your specific situation before deciding anything.
- Talk to someone confidentially before your next payment. A nonprofit credit counselor can look at your whole financial picture for free and help you plan a way out. The organizations below will not judge you and will not report you for having borrowed the money.
For a full step-by-step plan, see our guide on how to get out of loan shark debt.
Getting confidential help with the debt
- GreenPath Financial Wellness: free, nonprofit financial counseling by phone or online.
- Money Fit: a nonprofit debt relief program that can consolidate unsecured debts into one manageable monthly payment.
- Department of Justice list of approved credit counseling agencies: a safe way to find a legitimate counselor in your state.
- United Way 211: free, confidential help finding local programs that pay for rent, utilities, food, and medical costs, so more of your income can go toward getting free of the debt.
How to report a loan shark
Reporting an illegal lender protects you and the next borrower. You can report to more than one agency, and you can usually do it without a lawyer:
- Your state attorney general: most have a consumer protection division that takes complaints about illegal lending.
- Your state financial regulator: the agency that licenses lenders in your state can confirm whether a lender is licensed and investigate those that are not.
- Federal Trade Commission: report fraud, scams, and abusive lending practices.
- Consumer Financial Protection Bureau: submit a complaint about a lender or debt collector.
- The FBI or local police: if there are threats, violence, or extortion involved, this is a criminal matter, not just a consumer complaint.
We cover the process in detail, including what information to gather first, in how to report a loan shark.
If you are being threatened
Take every threat seriously. Do not meet the lender alone, do not hand over documents like your passport or bank card, and save every threatening message as evidence. Contact the police, and read our guide on what to do if a loan shark threatens you for practical steps you can take today.
Dealing with your other debts legally
Many people turn to loan sharks because legal debts already feel unmanageable. There are legitimate ways to deal with those debts, including nonprofit debt management plans, hardship programs offered by your existing creditors, and in some cases bankruptcy. Start with these resources:
- FTC: How to Get Out of Debt: how to manage debt and deal with debt collectors, and how to spot debt relief scams.
- FDIC Consumer Resource Center: plain-language guides to banking, credit, and your rights.
- Ramsey Solutions: What Is Debt Relief?: an overview of debt relief options and their trade-offs.
- HUD: Avoiding Foreclosure: free housing counseling if you are behind on your mortgage.
Financial assistance resources
- USAGov: Facing Financial Hardship: government programs for food, housing, bills, and emergencies.
- USAGov: Government Benefits: find benefits you may qualify for.
- USAGov: Disability Financial Support
- USAGov: Student Loans
- MyMoney.gov: Life Events: managing money through job loss, illness, and other major changes.
Safer ways to borrow
If the underlying problem is that you need money and cannot get a bank loan, there are legal options even with poor credit, including credit union loans, small dollar loan programs, and payment plans. See our guide to alternatives to loan sharks before you borrow anywhere informal.
Frequently asked questions
Do I legally have to repay a loan shark?
It depends on your state. In many states, a loan made by an unlicensed lender at an illegal rate is void or unenforceable, so the lender cannot use the courts to collect it. That does not stop some loan sharks from pressuring you anyway, which is why documentation and reporting matter. A local legal aid office or credit counselor can tell you how your state treats illegal loans.
Can I get in trouble for having borrowed from a loan shark?
Usury and unlicensed lending laws target the lender, not the borrower. Reporting a loan shark is not an admission of wrongdoing on your part.
What if the loan shark is someone I know?
Many illegal lenders are acquaintances, coworkers, or people known in the neighborhood. The same rules apply: keep records, do not borrow more, and get confidential advice. You can ask agencies about options without naming anyone until you are ready.
Will reporting actually change anything?
Reports are how regulators and police find patterns. Even if your report alone does not lead to action, it may be the piece that connects other complaints about the same lender. Reporting also creates a paper trail that protects you if the lender escalates.
This page is general information, not legal or financial advice. If you need advice about your specific situation, contact a licensed attorney, a legal aid office, or a nonprofit credit counselor. Last reviewed August 2026.