What is a common characteristic of predatory loans?

Predatory loans are typically characterized by high fees and aggressive lending practices. These loans often target vulnerable borrowers, such as those with low credit scores or limited financial knowledge. The high fees can include exorbitant interest rates, hidden costs, and charges that make it difficult for borrowers to pay off the loan or escape the cycle of debt. Aggressive lending practices may involve misleading advertising, pressure tactics, or failure to clearly explain the terms and conditions of the loan, which can leave borrowers in a disadvantageous position.

In contrast, options that suggest exceptional interest rates or transparent terms are more aligned with fair lending practices, which aim to foster financial well-being rather than exploitation. Flexible repayment options, while beneficial, are generally not associated with predatory loans, as these loans often lack genuine flexibility and instead impose rigid conditions that can trap borrowers.