What Exactly Is Predatory Lending?
Predatory financing typically refers to lending practices that impose unfair, misleading, or abusive loan terms on borrowers. Most of the time, these loans carry high charges and rates of interest, strip the debtor of equity, or spot a creditworthy borrower in a reduced credit-rated (and much more expensive) loan, all towards the advantageous asset of the financial institution. Predatory lenders often use aggressive product sales techniques and make use of borrowers вЂ™ absence of economic deals. Through misleading or fraudulent actions and too little transparency, they entice, induce, and assist a debtor to simply simply take away a loan that they’ll perhaps maybe not fairly manage to pay off.