Just when you thought it was safe their back, yes those predators of the personal finance world, loan sharks, are said to be thriving in the current climate of little or no cheap loans.

Debt charities and campaigners have seen a dramatic rise in the substantial number of clients who have borrowed at extortionate interest rates. The credit crunch has seen many people have their credit cards cancelled and refused loans by their banks. As a result people in financial difficulty have been easy prey for doorstep lenders and loans sharks eager to lend money at ridiculous high pay back interest rates.

The Financial Services Authority (FSA) estimates that up to seven million people are having difficulty gaining mainstream credit.

The Citizens Advice Bureau has recently reported that mortgage arrears problems had risen by 35 per cent in the first two months of 2008 compared to last year.

Neil Cooper, of Debt on your Doorstep, which campaigns to end high charges for sub- prime lending, said “I’m sure unauthorised lenders will see an opportunity there, but the biggest risk is the sub-prime lenders who already have heir infrastructure set up. People will be forced to go to them for very expensive loans because they can’t get credit elsewhere.”