Show-Me Predatory Lending: Where Does the Money Go?
Poverty at Issue Research Report, January 2012
Predatory lending is the practice of charging excessive fees for loans or payment agreements that are not in a consumer’s best interest, often using targeted, aggressive tactics and false claims, or failing to disclose all terms and costs up front.
A few basic signs help you recognize when a lender is using predatory practices. These are some red flags that should make a consumer wary:
- The lender pressures you to accept an offer.
- The lender ignores your questions about loan terms you do not understand.
- You get approved for a loan that is more than you wanted.
- You know you cannot make the payments you have been approved for.
- There are costs in the loan or rental papers you did not know about.
- The lender says you have to buy credit insurance to be approved.
- The loan agreement says you must pay everything back at once instead of in regular, smaller payments.
- You cannot pay off the loan early without a penalty.
- You do not have the right to sue if something goes wrong.
- The interest rate is extremely high.
- The lender asks you to sign blank papers that he or she will finish later.
- The lender keeps pressuring you to refinance and it happens several times a year.
- You were promised your monthly payments would be lower in the future, but instead they are higher.
- You received a call or a letter offering you a loan. This was not information you asked for.
If you have experienced any of these signs, you might be dealing with a predatory lender. Please look through this Web site for more information on predatory lending practices, ways to avoid becoming a victim of predatory lending, and resources and information on the predatory lending business.
Test your knowledge regarding lending policies in Missouri to prevent a creditor from taking advantage of you:
- Predatory Lending Awareness Quiz
- Payday Loans Quiz
- Overdraft Loan Quiz
- Car Title Loans Quiz
- Pawnshop Loan Quiz
- Refund Anticipation Loan Quiz
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