Final answer:
Predatory loans often have fees that cost more than the original loan amount, leading to financial struggles for borrowers. Legislation has been introduced to address predatory lending practices and protect consumers. Borrowers should carefully review loan terms before taking out a loan.
Step-by-step explanation:
Predatory loans often have fees that cost more than the original loan amount. For example, if a borrower takes out a $1,000,000 loan with predatory terms, they may end up paying more than twice the original loan amount due to high fees and interest rates.
Research has shown that predatory lending practices can be common in certain financial markets, such as credit card companies, where borrowers can be charged high interest rates and fees. These high costs can make it difficult for borrowers to pay off their debt and can lead to financial struggles.
Legislation has been introduced to address predatory lending practices and protect consumers from excessive fees and interest rates. It is important for borrowers to carefully review loan terms and understand the potential costs and risks before taking out a loan.