5 Potential Warning Signs of Predatory Lending

Anyone can fall victim to predatory lending if they do not know how to recognize the red flags. Predatory lenders use unfair business practices to make money at the expense of borrowers. Often, these borrowers are dragged into a cycle of debt and burdened with financial hardship.

Here are five warning signs that may indicate a lender is employing predatory lending practices:

  1. The loan sounds too good to be true: You should be suspicious of offers that are much better than what you had expected. If a company makes a lofty promise, say, to give you a cheap loan despite your low credit score, they likely have something to gain.

  2. The pricing and terms are unclear: It is important to understand the fees, risks, and terms of the loan. If the terms do not make sense to you, do not sign. Shady lenders often use a lack of transparency as well as unusual terms and formats to get you to accept a loan when you do not have a clear sense of all the details.

  3. The approval process moves too fast: If you are in a tight spot, it can be tempting to take out a loan that does not require a lot of work upfront. However, if you have to provide little to no documentation, that can be a major red flag. Reputable lenders have a thorough application process and require detailed information from their borrowers.

  4. The loan offer was made over the phone: Reputable lenders will rarely make loan offers over the phone, through the mail, or via door-to-door solicitations. For that reason, you should beware of any loan offers made through these types of channels. Keep in mind that unsolicited loan offers are almost always scams or forms of predatory lending.

  5. The lender has a bad reputation: If you are not sure about a company, it is smart to look for consumer complaints or other warnings that may indicate a poor reputation. You can check the Better Business Bureau, Federal Trade Commission, and similar sites.

Explore Your Legal Options for Free

Victims of predatory lending are often able to pursue the justice and compensation they deserve. If you need help with a predatory lending case, call 888-517-9115 for a free consultation. Markoff Leinberger serves clients from Chicago, Illinois and across the country.


  • * All indicated fields must be completed.
    Please include non-medical questions and correspondence only.
  • This field is for validation purposes and should be left unchanged.

Office Information

Office Hours

Monday-Friday: 9AM - 5PM Saturday-Sunday: Closed

Location Map:

Accessibility Toolbar

Scroll to Top