Predatory Lending Definition

Predatory lending is a rather vaguely defined term used to indicate any of a variety of practices used to promote or obtain loans. Any illegal loan activity is likely to be labeled as "predatory", as are a variety of legal but questionable practices. For example, a type of predatory lending would be a loan officer using mathematical trickery and fast talking to convince a potential borrower that they should obtain a large loan-the loan officer deriving some percentage of the loan amount as personal income. In most cases of predatory lending, the borrower is unable to adequately service the loan and faces the prospect of foreclosure, repossession, or bankruptcy.