Predatory lending is when a lender targets a certain group and markets personal loans, auto loans, or mortgages to that group that cost more. There may be higher application fees. You may have to pay more fees up front than ordinary to get a cheaper interest rate. The interest rates themselves may be outside the range of what is normally considered acceptable even for high risk loans. Your best defense against falling prey to predatory lending is to know your credit score and to shop around for the best rates and fees. Even people with bad credit can get reasonable terms on personal loans and other types of loans.

There are laws against predatory lending. If you suspect you have been a victim of predatory lending, you should report it to your state Attorney General's consumer protection office immediately. You can also contact the Federal Trade Commission (FTC), which works to prevent unfair business practices, by calling 877-FTC-HELP (877-382-4357) or visiting the FTC's Web site.

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