When Creditors Are Predators

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:

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