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DEFINITIONS

Predatory lending

Definition

In the strictest and legal sense of the word Predatory lending refers to secured loans such as home or car loans which are made by the lender with the intention that the borrower can't really pay them which would allow the lender to sieze the car or home and sell it for a profit. The word has been expanded to refer to the practice of convincing borrowers to agree to unfair and abusive loan terms. This could be done either through outright deception or through aggressive sales tactics, taking advantage of borrowers' lack of understanding of extremely complicated transactions. Predatory loans, for instance, for the purchase of a home, could lead to foreclosure.



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