How many people know what a Predatory Loan is!
- Thread starter Haya01B
- Start date
Predatory lending is a pejorative term used to describe unfair, deceptive, or fraudulent practices of some lenders during the loan origination process. While there are no legal definitions in the United States for predatory lending, an audit report on predatory lending from the office of inspector general of the FDIC broadly defines predatory lending as "imposing unfair and abusive loan terms on borrowers."[1] Though there are laws against many of the specific practices commonly identified as predatory, various federal agencies use the term as a catch-all term for many specific illegal activities in the loan industry. Predatory lending should not to be confused with predatory mortgage servicing (predatory servicing) which is used to describe the unfair, deceptive, or fraudulent practices of lenders and servicing agents during the loan or mortgage servicing process, post loan origination.
One less contentious definition of the term is "the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against."[2] Other types of lending sometimes also referred to as predatory include payday loans, credit cards or other forms of consumer debt, and overdraft loans, when the interest rates are considered unreasonably high.[3] Although predatory lenders are most likely to target the less educated, racial minorities and the elderly, victims of predatory lending are represented across all demographics.[4][5]
Predatory lending typically occurs on loans backed by some kind of collateral, such as a car or house, so that if the borrower defaults on the loan, the lender can repossess or foreclose and profit by selling the repossessed or foreclosed property. Lenders may be accused of tricking a borrower into believing that an interest rate is lower than it actually is, or that the borrower's ability to pay is greater than it actually is. The lender, or others as agents of the lender, may well profit from repossession or foreclosure upon the collateral.
1 Abusive or unfair lending practices
2 Disputes over predatory lending
3 Underlying issues
4 Predatory borrowing
5 United States legislation combating predatory lending
One less contentious definition of the term is "the practice of a lender deceptively convincing borrowers to agree to unfair and abusive loan terms, or systematically violating those terms in ways that make it difficult for the borrower to defend against."[2] Other types of lending sometimes also referred to as predatory include payday loans, credit cards or other forms of consumer debt, and overdraft loans, when the interest rates are considered unreasonably high.[3] Although predatory lenders are most likely to target the less educated, racial minorities and the elderly, victims of predatory lending are represented across all demographics.[4][5]
Predatory lending typically occurs on loans backed by some kind of collateral, such as a car or house, so that if the borrower defaults on the loan, the lender can repossess or foreclose and profit by selling the repossessed or foreclosed property. Lenders may be accused of tricking a borrower into believing that an interest rate is lower than it actually is, or that the borrower's ability to pay is greater than it actually is. The lender, or others as agents of the lender, may well profit from repossession or foreclosure upon the collateral.
1 Abusive or unfair lending practices
2 Disputes over predatory lending
3 Underlying issues
4 Predatory borrowing
5 United States legislation combating predatory lending
Don't worry, I think the feds are about to buy out all of those 
Nobody wants socialism but every one wants the gov to tell these places the amount of profit they are allowed.
Posted via Mobile Device
Posted via Mobile Device
That is because it is "Socialism" when people disagree with it. When they agree it is ok.
Let call it "Situational Socialism"....
Haya01B
Registered
I have seen it in the form of the old car lot in the neighbor hood that sells the lemons for peoples tax refund only to repo it when the buyer refuses to pay for it while broke down after a few months of sale. They then tow the car back to the lot and get the mechanic to get it test drive ready, spray down the engine and shine it up. Now it is ready for the next tax refund check. I have seen the same car sold about 3 times by the same dealer. Some of them don't even repo the car after selling it so many times.
That is because it is "Socialism" when people disagree with it. When they agree it is ok.
Let call it "Situational Socialism"....
Caveat emptor
jdsbusa
Registered
That's not even a fair comparison. Yeah payday loans are providing a service, but seriously.....400+% interest rates that they charge is just wrong especially considering that many people using these loans are already living paycheck to paycheck. It puts them in a cycle that they often can't get out of because they take out multiple loans to pay off each other. In IL you can only have 2 payday loans at a time. In the past you'd see people with 5 or 6 loans out at a time. It gets to the point where the entire paycheck is gone just to pay the exorbitant interest rates. Credit card companies already run 20+% routinely which is pretty high. The real crooks are the title loan companies that sit off military installations just waiting for some 18 yr old recruit just in the military that doesn't understand how quick interest on a loan like that can compound so quickly, next thing you know they've lost their car.
afterhours
Registered
They wouldn't be able to charge it if people didn't pay it. Capitalism. Free market. That's what its based on. I charge what I can and make a profit. How about we stop depending on payday loans stop living paycheck to paycheck and stop whining that were being taken advantage of when we are the ones agreeing to the terms.
Posted via Mobile Device
Posted via Mobile Device
afterhours
Registered
i have no sympathy for grown adults that do not understand the contract they are signing....
and have even less for people that go to these payday loan places, then complain about the interest they are charged....
nobody is forcing you to do this....
personal responsability.....
live within your means and you do not have to pay interest to borrow other people money.
jdsbusa
Registered
Life isn't always black and white dude....some people honestly need help every now and then and places like this are out to take advantage of it. I hardly consider most 18yr olds "grown adults" - they can't even buy a beer.
As for it being capitalism.....it's a complete lack of morals and ethics is what it boils down to. If doctors jacked their fees 10x's just because they could get away with it people would be up in arms! But hey, no one's forcing you to go to the doctor....right?
Yea you've got it all figured out. What do you do for a living. Whatevr it is you and your company make too much money and I don't make enough so I gonna whine about it and want the gov to place a limit below what you already make.
Posted via Mobile Device
Posted via Mobile Device
jdsbusa
Registered
Again, lack of morals....could you sleep at night knowing you're charging your customers 400% interest on their money? Myself, no way....guess that's the difference in the world. Some people have no ethics or morals of decency towards others.
Some people don't understand a free market either. If people didn't pay it the peoples moral fiber you question wouldn't be around. I guess shutting the place down and some people losing their jobs wouldn't bother you either. Wtf has happened here. Everybody expects everyone else to look out for thema and get everything in life as cheap and easy as possible. Nobody should have to work and save we all should get loans have credit card and it all should have fixed apr at around 2percent sounds awesome. Wait around for it and let me know how it works out for ya.
Posted via Mobile Device
Posted via Mobile Device
afterhours
Registered
personal responsability......
first off lets get some real info into the conversation. a payday loan is a short term loan, and it is not 400% interest. that is just another half truth that people repeat w/o knowing the facts.
a typical payday is a very short term loan, $100.00 for 14 days.
$100 x 400% = $400.00
nobody is paying $400.00
the interest is compunded daily usually around 1% -1.10% daily.
1.10% x 356 days = 391% (thats where you get the 400% interest people keep repeating.
in reality you get a loan for 14 days
$100 x 1.10% = $1.10 per day
$1.10 x 14 days = $15.40 total interest
so your $100.00 loan will cost you $115.40 to pay back.
i have members of my family that are irresponsable, live above thier means and go to these places....they borrow money, bust ass to pay it off and then go out and buy more crap that they cannot afford.
Similar threads
