An abusive practice in which lenders grant loans to weak borrowers and charge them high fees and interest rates,which may cause the borrower to default on the loan is known as:

Question

Quizplus · Accepted Answer

Predatory lending refers to the practice of charging high fees and interest rates to weaker borrowers who may not have the ability to repay the loan. This can lead to a cycle of debt and ultimately, default. It is considered an abusive practice that takes advantage of vulnerable individuals or communities. Option A, installment loaning, and option B, credit card loaning, do not capture the exploitative and deceptive nature of predatory lending. Option D, herbivore lending, is incorrect as it is not a recognized term in finance or lending.

An Abusive Practice in Which Lenders Grant Loans to Weak