predatory lending investment & finance definition

An unscrupulous lending practice that targets low-income or otherwise vulnerable people. Predatory lending involves making high-cost loans to borrowers based on their level of assets and not on their ability to repay the debt. This practice also may require a borrower to refinance the loan repeatedly, which lets the lender charge high points and fees. Another predatory practice is using fraud or deceit to conceal the true cost of the loan from an unsophisticated borrower.