Which of the following is most likely to be considered predatory lending?

The selection of offering loans with terms that involve excessive fees as the most likely to be considered predatory lending is rooted in the characteristics that define predatory lending practices. Predatory lending often exploits borrowers, particularly those who are vulnerable or lack financial literacy, by imposing unfair and deceptive terms. Excessive fees can significantly increase the cost of borrowing and lead to situations where borrowers find it difficult to meet their repayment obligations, thereby trapping them in a cycle of debt.

This practice can also encompass hidden fees and costs that are not clearly communicated to the borrower at the outset, further compounding the potential detrimental impact on their financial wellbeing. In contrast, loans with fixed interest rates, adjustable-rate mortgages with clear disclosures, and loans backed by government assistance programs are generally structured to be more transparent and fair to consumers, making them less likely to fall under the category of predatory lending practices. These options typically provide borrowers with a clearer understanding of their obligations and potential costs, thereby aligning more with responsible lending standards.