ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Predatory lending is any lending practice that imposes unfair and abusive loan terms on borrowers, including high-interest rates, high fees, and terms that strip the borrower of equity. Predatory lenders often use aggressive sales tactics and deception to get borrowers to take out loans they can’t afford.

Detailed explanation-2: -Predatory lending is any lending practice that uses deceptive or unethical means to convince you to accept a loan under unfair terms or to accept a loan that you don’t actually need. Predatory lenders often target minorities, the elderly, the less educated, and the poor.

Detailed explanation-3: -Predatory lending is any unfair practice that diminishes a borrower’s ability to repay debt and serves to benefit the lender. Predatory lending tactics may involve loans with high-interest rates, hidden and excessive fees, undisclosed terms, and more.

Detailed explanation-4: -Which statement best describes why payday loans, auto title loans, and pawnshop transactions are sometimes referred to as “predatory lending"? Competition to qualify for these loans is fierce, like a predator.

Detailed explanation-5: -Payday loans are one of the most common types of predatory lending. While many states have imposed limits on interest rates and added consumer protections, some have not – and even where protections are in place, the loan terms are predatory and borrowers can get into an endless cycle of borrowing and repayment.