Predatory lending has become a nationwide concern. So begins a straightforward article in The Sulphur Daily News.
With the holidays behind us and the credit card bills on their way, consumers should be aware of what predatory lenders look for in their target victims. But before one can recognize predatory quick cash advance lenders and their tactics, you must first understand the nature of the beast.
Predatory lending is the practice of convincing borrowers to agree to unfair and burdensome loan terms. The most common predatory lending abuses occur in pay day loans, credit cards, and overdraft loans.
Predatory lenders often are accused of being discriminatory because they target the poor, the elderly, college students, and most recently military families.
Their marketing tactics include aggressive solicitation, home improvement scams and other too-good-to-be-true offers, which all end up costing the borrower exhorbitant amounts of money in the form of high annual interest rates and excessive fees.
Consumers who have overextended themselves during the holiday season may begin to feel the pinch in January and be looking for financial relief by accepting a tempting credit card offer or no fax payday loan.
The most common type of predatory lending in our area is payday loans.
If your look around town, you will see the numerous payday loan establishments that have cropped up in the last couple of years. These storefront businesses prey on the poor and the uninformed.
It’s not hard to see how easily the payday advance loan can dig a bigger hole of debt rather than help the borrower out of a short term crisis.
The Center for Responsible Lending says payday borrowers on average receive 8 to 13 payday loans a year. Moreover, 90 percent of payday lenders‘ revenue growth comes from making more or larger loans to the same customer.