Predatory Lending

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Loans which are given under deceptive and unfair pretenses are known as predatory loans; this type of lending is often classified as fraud. The terms of the loans written under these types of practices are abusive and target certain groups of people. Lenders of predatory loans take advantage of people with credit problems and debt, the very poor, young adults without financial security, the elderly who depend on SSI for income, and uneducated individuals – the lenders find people who don’t have other options or don’t realize there’s other types of loans out there.

Types of High Risk Lenders

The predatory loan is one which begins with unfair terms; this is not to be confused with certain predatory mortgage practices which operate on the ‘bait and switch’ theory – lenders promise a low rate on high risk mortgage loan and then raise rates significantly for no conceivable reason. Predatory loan providers usually explain their unreasonable terms in a very skewed way – borrowers are getting a sales pitch, not an adequate explanation of what they are agreeing to. Common operations like this call themselves pay day loans, car title loans, overdraft loans, and even come in the form of credit cards.

What Can The Borrower Do to Save Themselves

It can be very difficult to get out from under the mountain of problems these loans cause once the borrower has signed over their rights. If the borrower is lucky enough to have the ability to get a loan through a reputable source such a credit union, that would be an ideal avenue for paying it off immediately; the National Credit Union Association site has many resources and information about credit unions. Otherwise, reviewing the legal credibility of the agreement is the next best option, especially if the consumer is facing repossession and thousands of dollars of debt. Avoiding the circumstance entirely is the only way to keep from getting ripped off by a predatory lender; if there are any other options for emergency money, exhaust those avenues before even considering a high risk loan.


Written on behalf of Louthian Law Firm, P.A. A personal injury law firm located in Columbia, South Carolina.  For more information, please visit us at

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