Predatory lenders utilize a range of deceptive tactics to ensnare borrowers. These include charging exorbitant fees that are often concealed or downplayed, implementing large balloon payments at the end of a loan term to deceptively lower monthly payments, and encouraging repeated refinancing, known as loan flipping, to generate continuous fees. Another common practice is asset-based lending, where loans are granted based on an asset like a home or car rather than the borrower's ability to repay, putting the asset at significant risk. Lenders may also add unnecessary products or services to loans, such as single-premium life insurance for a mortgage, further increasing costs.

A particularly insidious tactic is steering, where borrowers eligible for prime loans are directed toward more expensive subprime options. This practice, along with reverse redlining, disproportionately affects vulnerable communities, including women, and Black and Latino/Latina populations. Historically redlined neighborhoods, still largely inhabited by minority groups, are often targeted by these lenders, perpetuating economic inequality. For instance, Black women with high incomes were found to be five times more likely to receive subprime loans compared to White men with similar financial standing during the housing boom that preceded the 2008 financial crisis. The ensuing foreclosure crisis severely impacted these communities, widening the racial wealth gap, as demonstrated by the 2012 settlement against Wells Fargo for discriminatory lending practices.

Beyond traditional mortgages, predatory lending extends to other loan types. Payday loans, characterized by short terms and extremely high annual percentage rates (APR) often ranging from 390% to 780%, are frequently rolled over, leading to escalating debt burdens. Auto-title loans, which use a vehicle as collateral, also carry high interest rates and can result in the seizure of the borrower's car, jeopardizing their livelihood. Emerging trends in the gig economy and fintech, such as 'buy now, pay later' schemes, also present new avenues for predatory practices due to a lack of transparency regarding fees and interest rates.

To counteract these predatory practices, many states have implemented anti-predatory lending laws, some even outlawing payday lending or capping interest rates. Federal agencies like the U.S. Department of Housing and Urban Development (HUD) and the Consumer Financial Protection Bureau (CFPB) have also taken measures, although regulatory protections can fluctuate. Consumers can safeguard themselves by improving financial literacy, meticulously comparing loan offers, and exploring alternative financial support from public assistance programs, family, or religious organizations to avoid falling victim to unfair loan terms.