Predatory loans
The term predatory loan refers to a variety of abusive lending practices. Predatory lenders use high-pressure sales tactics. They only offer you high interest loans with lots of junk fees tacked on, even though you may qualify for a better loan. High interest rates and unnecessary fees raise the amount you must borrow, and make it hard for you to make your monthly payments. This puts you at risk of losing your home and the money you have paid into it.
You wont know if a lender is legitimate or predatory until you shop around and get quotes from several lenders. If you are buying a home, or simply refinancing your current loan, its important to compare different loans and the cost of each. Even if you have good credit, you can fall victim to predatory lenders. Protect yourself by shopping for loans at different banks, credit unions and other lenders.
Predatory lending tactics
Predatory lenders:
Dont tell you about lower rate loans you may qualify for.
Add unnecessary fees, commonly called junk fees to pad their profit.
Encourage you to repeatedly refinance. This allows them to collect more...
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