How Predatory Lenders Manipulate The Terminology?

EPF Last Update: June 3, 2020

Predatory lenders make a lot of money from people with their super high interest rates. According to our study, payday loan APR average at 400% and many people get into debt cycle. Auto title loans APR average at 300% and many people lose their collateral, because they are not able to pay their loan on time.

It’s obvious that predatory lenders have a huge interest into getting more customers.

Their main target are people with bad credit. Payday lenders try to manipulate people with low credit score, that they have no other options. In fact, that is not true! Many people with bad credit, after a research, would found that they qualify for better loans.

Another way that payday lenders use to get more customers by manipulating the terminology.

And here the things become tricky!

Because people with bad credit are easy manipulated and also they are not educated correctly on the bad credit loans business.

So, the lack of knowledge is another problems! And payday lenders benefit from that. And they do that tricky.


You are looking for a loan and you are with bad credit. Many people would go and search for bad credit loans. But the types of companies that would appear are different. Some would be payday loans, other would be auto title loans, other would be personal loans for bad credit.

Many of the people, would come up with getting a payday loan. And none of these people know that they would qualify for cheaper loans, even if they are with bad credit.

Do you know that there are personal loans for bad credit with a typical APR of 15% to 35.99%?

Do you know that there are many types of loans and predatory lenders that try to present them that way?

Below we will give you a list of all types of loans and will explain how predatory lenders manipulate the terminology in their interest.

Bad Credit Loans

Bad credit loans are these that serve people with bad credit. There is not exact type of loan under this term, because they are many.

Here are the most common types of bad credit loans:

  • Payday loans. Typically up to $1,000, APR average at 400%.
  • Auto title loans. Typically less than the amount on the collateral, APR average at 300%, secured types of loans.
  • Personal loans for bad credit. Up to $100,000, APR 15% – 35.99% for bad credit.
  • Business loans for bad credit.

As you can see payday lenders are not the only types of loans that offer bad credit loans. Many people with bad credit would qualify for personal loans.

  • How predatory lenders use bad credit loans to manipulate people?

Payday lenders promote their businesses like loans for bad credit. This technically is not scam. The scam part come from the fact that not all bad credit loans are a type of payday loans.

Are you looking for a bad credit loans? You don’t have other options than us. We are the only one your solution …

Short Term Loans

Short term loans are loans that are with relatively short repayment plans. The repayment plan could be one to few months repayment.

Payday loans are a type of short term loans, but not all short term loans are payday loans. And not all people who get short term loans are with bad credit.

  • How predatory lenders use short term loans to manipulate people?

Payday lenders try to promote their businesses like short term loans. The tricky part is that this is true. But like we’ve mentioned, not all short term loans are payday loans. People who are looking for short term loans, should carefully research all options available. Only people with very low credit score, should end up with payday loans. All other people would qualify for better loans.

No Credit Check Loans

No credit check loans are types of loans, that the lender don’t check your credit score.

How these loans exist? Are they legit?

The truth is that most of these loans are predatory. If a loan company don’t check your credit score, the main reason is that they know very well that it is low … And they give you a loan, that is very expensive, without checking your credit score.

The situation looks like that:

You have very low credit and you have already tried to apply with many legit lenders. And you have found that no one give you a loan. Then your options are limited. And you go to no credit check loans. They exist and in most of the cases they give you loans that are very expensive.

Most of these no credit check loans are predatory. We highly recommend that you avoid them. It’s great that you have options available, but on a very high price.

  • How predatory lenders use no credit check loans to manipulate people?

Predatory lenders attract people with very low credit score and probably low income that their credit wouldn’t be checked and the loan would be approved with no problem.

But is the term no credit check manipulated? Are payday loans the only type of loans that offer no credit check loans?


In most of the cases no credit check loans and payday loans are the same.

But, there are other types of loans that are not payday loans, but are no credit check loans.

Example of these loans are:

  • Auto title loans.
  • Alternative payday loans.
  • Other variations of bad credit loans.

Ok, but are they legit?

Well, we’ve discussed this many times on our site.

The term legit lender means only one thing. It’s whether a lender is licensed in your state and whether he apply all loan requirements under the state law.

State laws are different!

Note that there are state laws that don’t regulate payday loans. So, in these states all payday loans are legit. But this doesn’t mean that they are recommended.

Payday loans and no credit check loans are close terms. So there is a type of manipulation, but slight. Because almost all no credit check loans are predatory and some of them are out of the laws.

Alternative Payday Loans

The fact that you see the term payday loans, doesn’t mean that these types of loans are like payday loans. Alternative payday loans fill the gap between personal loans and payday loans. We have a complete guide on them. It’s questionable whether they are predatory or not. It’s true that they are improved payday loans but still they are very expensive.

  • How predatory lenders use alternative payday loans to manipulate people?

By the name! There is not an exact definition of that alternative payday loans are. Also there is not exact APR range in which payday loans are capped. So all payday lenders easily can try to manipulate people that they are alternative payday lenders.

Personal Loans for Bad Credit

Personal loans are these that offer loans of up to $100,000. They are types of installment loans. Personal loan APR is capped at 35.99%. This is the most important factor that define them. If a company offer a loan with more than 35.99% and tell you that they are personal loans, this is questionable.

The difference between payday loans and personal loans is obvious. But the question is, whether personal loans approve people with bad credit.

And the answer is:


The lending market is significantly improved these days and many people with bad credit get approved for a personal loan.

Based on the risk based lending the APR is higher, but still capped at 35.99%. People with bad credit should expect 15% to 35.99%.

The tricky part:

Most legit lenders that claim personal loans, cap their APR at 35.99%. But this is not a lawful statement. This is a standard, but not a law in all states.

States have different loan laws.

And here is the gap for manipulation.

  • How predatory lenders use personal loans to manipulate people?

The interest in payday lenders to attract personal loans customers is huge. Payday lenders try to mislead people by terms like, we offer personal loans, installment loans, and so on.

The lack of lawful definition help them a lot.

But all payday loans are one time loans?

That’s not true!

Do you know that these days the number of lenders that offer installment payday loans raise significantly?

Installment payday loans are slightly improved payday loans, and slightly decrease the chance of debt cycle, because they offer better repayment terms. But they are much more expensive than personal loans.

And here is the catch?

Are you looking for a personal loan? Are you with bad credit?

Come and get a personal loan on APR of 400%.

Is this loan personal in case its installment? What make it differ from traditional personal loans?

Laws are not clear in all states to that problem, so …

The standard make it!

All loans that are over 35.99% are NOT personal loans.

No Income Verification Loans

Stay away from them. They are even more dangerous than no credit check loans.

Lenders don’t check your income. The chances of debt cycle is huge!

  • How predatory lenders use no income verification loans to manipulate people?

Some lenders try to promote their businesses like no income verification loans, but here the catch is different. Because not all payday lenders are no income verification.

Note that most of them don’t check your credit score, because they know that it is low. But typically payday lenders check at least your income.

Payday Loans

Let’s finally say few things about payday loans. We don’t recommend them because they are very expensive and lead people into debt cycle.


  • Fast and quick cash with no credit check.
  • No credit check also mean that your credit score wouldn’t be lower.


  • Very expensive.
  • High chance of debt cycle.

We highly recommend you to get a payday loan only at the end case. If you get it, you should try your best to pay it back instantly.

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