The vocabulary of illegal and predatory lending, defined in plain language. Terms link to the full guides where the concept matters most.
APR (annual percentage rate)
The yearly cost of a loan including interest and most fees, expressed as one percentage. Federal law requires legal lenders to disclose it, which is what makes prices comparable. A lender who will not state an APR is hiding something, and often everything.
Balloon payment
A loan structured with small payments and one large final payment. Often a setup for refinancing, for a fee, when the balloon comes due.
Bust-out
An organized crime technique in which a business indebted to a loan shark is taken over, drained of credit and inventory, and left to fail. Documented at length in loan sharks and organized crime.
CDFI (community development financial institution)
A certified lender that serves communities mainstream finance overlooks, and a legitimate option for borrowers with poor credit. Listed in alternatives to loan sharks.
Collateral
Property that secures a loan, which the lender can take if you default. Loan sharks pervert the concept by holding ID documents, bank cards, or phones, which no legal lender may do.
Credit counseling
Free or low cost advice from nonprofit agencies on budgets and debt. The safe way to find one is through the Department of Justice approved list on our debt help page.
Criminal usury
Lending above a rate threshold set by state criminal law, as opposed to civil usury which merely affects enforceability. In New York, for example, unauthorized lending above 25 percent a year is criminal usury.
Debt management plan
A repayment arrangement negotiated by a nonprofit credit counselor that consolidates unsecured debts into one payment, often at reduced interest.
Earned wage access
Apps or payroll features that release pay you have already earned before payday, usually for a small fee. A far cheaper bridge than any payday product when used occasionally.
Extortionate credit transaction
The federal crime, 18 U.S.C. sections 891 to 894, of extending or collecting credit through actual or threatened violence or harm. This is the statute written against loan sharking in 1968.
Juice
Chicago slang for illegal loan interest, as in juice loan. The New York equivalent is the vig.
Loan flipping
Repeatedly refinancing a loan to generate new fees while the balance grows. A core predatory lending move flagged in predatory loan warning signs.
Loan shark
An unlicensed lender charging illegal rates and collecting outside the law. The full definition, history, and warning signs are in what is a loan shark?
Packing
Folding add-on products, such as credit insurance or memberships, into a loan’s financed amount without meaningful consent, so you pay interest on products you never wanted.
Payday alternative loan (PAL)
A small loan of $200 to $2,000 offered by federal credit unions with rates capped at 28 percent, designed specifically to replace payday borrowing.
Payday loan
A short term loan priced as a fee, typically $15 to $30 per $100 for two weeks, roughly 400 percent APR. Explained in payday loans.
Predatory lending
Lending designed to profit from a borrower’s failure rather than repayment, much of it legal. The umbrella guide is what is predatory lending?
Principal
The amount actually borrowed, as distinct from interest. Loan shark loans are structured so payments cover interest only and the principal survives indefinitely.
Rollover
Paying a fee to extend a loan for another term instead of repaying it. The engine of the payday and title loan debt cycle.
Salary lender
The original American loan shark of the 1880s to 1920s, lending against wages at several hundred percent a year and collecting through the threat of telling your employer. See the history of loan sharks.
Shylocking
Older New York slang for loan sharking, taken from Shylock in Shakespeare’s The Merchant of Venice.
Six-for-five
The classic street loan: borrow five dollars, repay six a week later, which is 20 percent weekly interest. Run the numbers in our debt calculator.
Title loan
A loan secured by your car’s title at around 25 percent per month, with the car repossessed on default. Explained in title loans.
Usury
Charging interest above the legal maximum. State usury laws set the caps that make loan shark rates illegal, covered in are loan sharks illegal?
Vig (vigorish)
New York slang for the weekly interest on an illegal loan, borrowed from gambling. Paying the vig keeps the loan alive without reducing the principal.
This page is general information, not legal or financial advice. Last reviewed August 2026.