West Virginia Mortgage Law Test 2025 – 400 Free Practice Questions to Pass the Exam

Predatory lending is characterized by exploitation within the borrowing process, where lenders use deceptive and unfair practices to trap borrowers into unjustly high-interest loans. This often arises from misleading loan terms, inflated fees, and aggressive marketing tactics that target vulnerable consumers.

When borrowers are subjected to predatory lending, they may end up with loans that have exorbitant interest rates or hidden costs that make repayment extremely difficult, ultimately putting them at risk of foreclosure or severe financial strain. The primary consequence of such practices is that borrowers find themselves ensnared in a cycle of debt, struggling to meet payments on loans that they may not have fully understood at the outset.

In contrast, options suggesting favorable loan terms, rapid approvals, or reduced costs do not accurately depict the nature of predatory lending. Instead, they focus on benefits that are typically absent in exploitative lending situations. Thus, the selected consequence clearly highlights the unethical nature of predatory lending and its detrimental impact on borrowers.