__________ lending is a practice on the part of the subprime lending market whereby lenders take advantage of less sophisticated consumers or those who are desperate for funds by using the lenders' superior bargaining positions to obtain credit terms that go well beyond compensating them for their risks.

Question

Quizplus · Accepted Answer

Predatory lending refers to a practice where lenders use inconsiderate, unethical, or even illegal tactics to persuade borrowers to take loans with unjust and unfavorable terms, such as a high-interest rate, hidden fees, and penalties, that they cannot afford to payback. The lenders take undue advantage of the borrowers' vulnerability, financial illiteracy, or lack of access to credit from traditional sources. This practice has been mostly observed in the subprime lending market that targets borrowers with poor credit scores or no credit history.

__________ Lending Is a Practice on the Part of the Subprime