Predatory lending embodies the insidious practice of exploiting borrowers through the imposition of unjust, misleading, or abusive loan terms. Such loans often come laden with exorbitant fees and interest rates, engineered to erode the borrower’s equity or maneuver them into a lower credit tier, ultimately favoring the lender’s bottom line.
This unethical lending strategy frequently involves employing aggressive sales tactics and capitalizing on borrowers’ limited comprehension of financial intricacies. Through deceptive maneuvers and a glaring absence of transparency, predatory lenders lure, coax, and facilitate borrowers into acquiring loans that they cannot feasibly repay. This predatory behavior not only harms individual borrowers but also undermines the stability of the broader financial system.
