Predatory Lending: What Is It? How Can You Avoid It?

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Editor’s note: Lantern by SoFi seeks to provide content that is objective, independent, and accurate. Writers are separate from our business operation and do not receive direct compensation from advertisers or network providers. Read more about our Editorial Guidelines and How We Make Money.
What Is Predatory Lending?
How Does Predatory Lending Work?
Is Predatory Lending Illegal?
Common Types of Predatory Lending
Subprime Personal Loans
Payday Loans
Auto Title Loans
Predatory Lending Examples
Avoiding Predatory Lending Tactics
Excessive and Abusive Fees
Balloon Payments
Loan Flipping
Loan Packing
Asset-Based Lending and Equity Stripping
Steering
Mandatory Arbitration
Abnormal Prepayment Penalties
Reverse Redlining
Choosing the Right Lender
APR Range
Term Length
Finance Cost Disclosures
The Takeaway
Frequently Asked Questions
Photo credit: iStock/urbazon
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About the Author
Sulaiman Abdur-Rahman writes about personal loans, auto loans, student loans, and other personal finance topics for Lantern. He’s the recipient of more than 10 journalism awards and served as a New Jersey Society of Professional Journalists board member. An alumnus of the Philadelphia-based Temple University, Abdur-Rahman is a strong advocate of the First Amendment and freedom of speech.
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