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Simple English definitions for legal terms
loansharking
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A quick definition of loansharking:
Loansharking: When someone lends money to another person at very high interest rates and uses threats or force to make sure the money is paid back. This is illegal and very dangerous.
A more thorough explanation:
Definition: Loansharking is the act of lending money at very high and unfair interest rates, and often using threats or violence to force the borrower to repay the loan. This is also known as extortionate credit transaction.
Example: A person borrows $500 from a loanshark and agrees to pay back $1000 in two weeks. The loanshark charges an interest rate of 100% per week, which is much higher than the legal limit. When the borrower is unable to repay the loan, the loanshark threatens to harm them or their family members.
Explanation: This example illustrates how loansharking works. The loanshark takes advantage of the borrower's desperate situation and charges an exorbitant interest rate. When the borrower is unable to repay the loan, the loanshark uses intimidation tactics to force them to pay. This is illegal and can cause serious harm to the borrower.