Which term describes lenders who try to trick or manipulate borrowers into unfair or harmful loans?

• A. Predatory lenders
• B. Credit
• C. Installment credit
• D. Revolving credit

Answer: (A)

Predatory lending describes lenders who trick or manipulate borrowers into loans that are unfair or harmful. They often hide true costs, push terms that are unaffordable, or structure loans in ways that trap a borrower in debt, such as excessive fees, very high interest rates, misleading disclosures, or balloon payments. The key idea is exploiting vulnerability and avoiding transparent, fair terms rather than offering responsible financing.

Legitimate forms of credit exist as well—like installment or revolving credit—but those terms refer to how a loan is structured, not to deceptive or harmful practices. They can be offered fairly with clear costs and affordable payments, which is what separates responsible lenders from predatory ones.