Understanding the Tactics Used by Predatory Lenders

Predatory lending can cause significant hardship for vulnerable consumers – although many don’t realize it until it’s too late. If you’re in a dire financial situation, being able to pocket cash the same day could be exactly what you need to bring much needed relief. But it’s crucial to understand what predatory lending is and how to avoid it since signing on the dotted line could make matters worse.

什么是掠夺性贷款?

Predatory lending is when a lender uses deceptive or unethical practices to entice a borrower to accept unfavorable loan terms. These lenders often target consumers with poor credit histories or those new to borrowing money. Shady lenders often use deceptive language and make false promises regarding the loan. Some will even require nonrefundable fees before reviewing the loan application.

掠夺性贷款的类型

There are two common forms of predatory loans: payday loans and title loans.

• 发薪日贷款 allow borrowers to receive all or a portion of their next paycheck immediately. Sixteen states, including Colorado, do not allow payday loans. But this doesn’t stop people from offering them.

Approval typically requires the borrower to share their banking account details so loan payments can be automatically withdrawn from the account. According to the Consumer Federation of America, payday loans typically 年利率(APR) 400% 或更多的.

• 标题贷款 require the borrower to hand over a vehicle’s title as collateral before approving the loan. The lender can keep the title and take ownership of the vehicle if the loan is not repaid as agreed. 加上一个 平均年利率300%在美国，这种贷款成本很高.

These loans typically require no credit check or income verification. If you’re unable to repay either loan in full when it’s due, the lender will roll everything you owe into a new loan tacking on more interest and fees. This leaves borrowers who are already struggling financially in a cycle of debt that’s difficult to escape.

掠夺性贷款人的危险信号

Avoiding payday and title loans doesn’t guarantee protection from predatory lenders. These individuals may call the loan by another name, such as “personal loan.” This is why you should know the warning signs of a predatory lender. 以下是一些常见的危险信号:

• The individual is unlicensed or unregistered as required by law. If the individual you’re talking with does not meet the legal requirements to act as a lender, 不和他们做生意. Verify their license by visiting the website of your 国家沙巴买球监管机构 or 州检察长办公室.

• The individual uses high pressures sales tactics to encourage you to sign the loan paperwork. It might be a predatory loan situation if they use fear or intimidation to get you to borrow money. Demanding that you “act now” or risk losing your loan approval is a common tactic to scare people into acting against their better judgment.

• The individual offers unfair loan conditions. This might include requiring high-value collateral for a small loan, 比如你的车的所有权, 换取500美元的贷款. Loan terms may be vague or not provided to you even after you’ve signed the agreement.

• The individual guarantees specific loan terms. If a lender makes promises of a specific interest rate before you’ve applied for the loan, 这可能会带来麻烦. No lender can guarantee an interest rate. It’s also important to make sure you understand the risks of the loan, such as if there is a pre-payment penalty or if the interest rate will increase after a certain period of time.

如何避免掠夺性贷款计划

Steer clear of predatory situations by reading the loan terms in full and asking questions about anything you do not understand. This includes confirming the interest rate and total costs associated with the loan. With this information in hand, you can make a better decision for your finances.