ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -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.

Detailed explanation-2: -Predatory lending tactics may involve loans with high-interest rates, hidden and excessive fees, undisclosed terms, and more.

Detailed explanation-3: -Predatory lenders typically target minorities, the poor, the elderly and the less educated. They also prey on people who need immediate cash for emergencies such as paying medical bills, making a home repair or car payment.