korkeakustannusluotot

Korkeakustannusluotot, often translated as high-cost loans or expensive credit, refers to loan products characterized by significantly higher interest rates and fees compared to conventional lending. These loans are typically offered to individuals or businesses with a higher risk profile, such as those with poor credit history, unstable income, or limited collateral. The elevated cost reflects the increased risk the lender undertakes.

Common examples of high-cost loans include payday loans, certain types of title loans, and some unsecured personal loans marketed to subprime borrowers. The interest rates on these products can be extremely high, often expressed as a very high annual percentage rate (APR), which can trap borrowers in a cycle of debt if they are unable to repay the loan on time. Additional fees, such as origination fees, late payment penalties, and rollover fees, can further inflate the total cost of borrowing.

Due to their potentially predatory nature and the risk of exacerbating financial hardship for vulnerable consumers, high-cost loans are often subject to regulatory scrutiny and consumer protection measures in many jurisdictions. These regulations may include caps on interest rates, disclosure requirements, and limitations on lending practices. Consumers considering such loans are advised to carefully review all terms and conditions, understand the total cost of borrowing, and explore alternative, lower-cost financing options if possible.