What is an example of a predatory lender

Predatory lenders take advantage of borrowers' circumstances or lack of knowledge. A loan shark, for instance, is the archetypal example of a predatory lender—someone who loans money at an extremely high-interest rate and may even threaten violence to collect on their debts.

How can you identify a predatory lender?

A lender that forgoes a credit check before offering you a loan does not assess how you've handled debt in the past or the potential impact of taking on more debt. Predatory lenders make up for that risk by charging high rates, typically well above 100% APR, and structuring loans with high upfront fees.

Which of the following is considered predatory lending?

By definition, predatory lending benefits the lender and ignores or hinders the borrower's ability to repay the debt. Predatory lending practices often try to take advantage of a borrower's lack of understanding about loans, terms or finances.

Which of the following best describes a predatory lender?

“predatory lending involves at least one, and perhaps all three, of the. following elements: • Making unaffordable loans based on the assets of the borrower rather than on the. borrower's ability to repay an obligation; • Inducing a borrower to refinance a loan repeatedly in order to charge high points and fees.