Evaluate this Writingevaluation should have the following: Memo format Introduction Thesis statement (the thesis statement should be points from the essay that could be improved) Topic sentences (these should be each point broken down with suggestions for improvement) ConclusionPredatory lending is a concept that is not difficult to understand; companies (commonly referred to as loan sharks) offer some cash to get through this month, or to make it to the next paycheck, or even to get a higher education. Usually, the loan will be accepted because the person is desperate. However, after the loan is accepted incredibly large interest rates would be applied to the them. This would trap the person who took out the loan to be in a state of constant payments. That exact scenario is exactly what the lender was going for in the first place. They target people with low incomes in order to get them into a cycle of debt that never ends. If their client were to make a single late payment, then they have no chance of getting out of their debt gracefully. Using ever changing loopholes and cunning, these lenders find ways to get around laws and into the wallets of people who really cannot afford any more debt. The two most common forms of predatory lending today are the best at finding loopholes, and they are the ever-changing payday loans, and for-profit college student loans.The lending industry has its always had its share of black sheep, but it is actually very regulated. The main code that binds these lenders is a law from the late 60s known as the Truth in Lending Act (Kenton, 2021). According to Will Kenton (2021) under the Truth in Lending Act any lender is prohibited from many different practices that are less than savory. They are not allowed to recommend a loan to a customer without first going over the term of the loan, and what the interest rate will be. They are not allowed to recommend a loan that is in the interest of their profit over the interest of their customer’s needs. The lender must also give their customer a three-day waiting period in which they can back out of the loan. These rules in theory ensure the safety of those seeking out a loan, but there are ways for the clever to take advantage of these rules.One loophole that can be found in the act by these lenders is that any interest rate is allowed so long as it is disclosed before the loan is given out. So, the question must then be asked, ‘how do I make sure that this loan gets accepted?’ The answer works heavily in their favor, make sure they are desperate. If they really need the money to get through the week, they are much more likely to accept the terms presented to them. As an added bonus, maybe they cannot afford to keep up with the loan payments. They are not breaking any section of the Truth in Lending act, but are still acting as the apex predator of the finance world.Of the most common forms of predatory lending, the one most prevalent right now is the payday loan. In a payday loan, a lender will give someone a small amount of a few hundred dollars now so they could pay some bills. But in exchange, the lender will be paid back with money from their paycheck. It sounds very simple and easy to avoid getting trapped by one of these loans, and for the most part it is. However, the hidden intentions of these lenders take advantage of this perception. If someone really needs a loan to get through the pay cycle, chances are taking out a loan will not be a one-time deal. As these loans increase in frequency, a missed payment becomes ever more likely. As soon as the payment is missed, incredibly high interest rates (sometimes in the triple digits of precents) are applied. People are then trapped in a cycle. Their payments to their loan go entirely to the interest, and the amount they owe does not change. In some extreme cases, they must take out more loans to get by, or to make their next payment. This is exactly what the lenders want. These loans are so devastating, the President of the Center for Responsible Lending recommends finding just about any possible alternative. In a Washington Post article, he said, “Subprime credit cards, even with interest rates at 36 percent APR, are one-tenth as expensive as payday loans” (Calhoun, 2016). That means that applying for a bottom of the barrel credit card is leagues better for a consumer than walking to the payday loan place down the street. That makes taking these loans an even worse decision overall.As the payday loan has evolved, it is taking on a new form online. Lending apps such as Dave or the Earnin app have made an easy-to-understand lending formula. The app will give up to one hundred dollars for whatever it is needed for. Then, they will just take that same hundred from the paycheck of the user when they get paid. This can be done a few times a week. That brings up the question, how do they make money off of this? The answer to that question is (kind of) optional tips of up to 10%. Tipping is a concept that just about everyone understands and accepts, making it easy to accept when an online lending app requests one. This gets around the Truth in Lending Act by cutting out interest rates all together. While it may not sound predatory on its own, the way it functions most certainly is. The app likes its users to build a dependance on it. If someone is living paycheck to paycheck and needs one hundred bucks every few days to get through, they will develop a need to use the app. After that, if they choose not to tip a particular week, the amount they can take out of their check goes down. So, after developing a crutch with the app, not tipping every time will prevent one from borrowing what one planned for and hold their future loans hostage. That system makes the small tips add up to large amounts very fast.The other common form of this kind of lending is the student loans of for-profit colleges. The advertisements for these institutions can be seen during just about any television viewing session. They like to present themselves as a perfect place to go to get a specialized education, or a place for working adults/parents to go back and get their degree. But in actuality, they are generally low-rate schools that are focused on the profit. In a 2020 article in Harvard Magazine, Matteo Wong touches on the practices of these schools. These schools are entities that, like payday lenders, target those who really should not be taking these loans. They find people who never imagined that they could receive a higher education, and exploit them. The loans they offer to potential students are awful. In the article, the author discusses a particular man’s story with one of these loans. They said that he had to take on eight thousand in debt just to afford tuition, and ended up with money being taken directly from his account, and a demolished credit score. After two years, his debt was almost fourteen thousand dollars (Wong, 2020). To top it all off, the degrees these people receive are not the kind of degree that can get them into their dream job either. They are in-fact, not viewed as very useful. Employers are not likely to hire someone who only has a degree from one of these schools. These loans are even harder on people than payday loans. They have the crippling debt, but they also leave people with a next-to-useless degree. But as long as the loan is fairly presented to a customer, the lenders are getting around the laws.Predatory lending is a practice that for the average person, is easy to steer clear from. Avoid loans that have awful interest rates, but if that cannot be avoided, pay them back on time. The only issue is that these lenders are not targeting those who are able to avoid them. They want people in shaky situations. Someone with inconsistent pay that might miss a payment, or someone in need for a quick hundred dollars, or even someone who wanted to go to college their whole life but never could. These lenders are dangerous to consumers and only have one thing on their mind, profit. They exploit loopholes in the law, and take advantage of those in need by giving them a seemingly endless stream of debt. Payday loans and for-profit student loans are dangerous to consumers, and should only be taken out at the customer’s own discretion.Arts & HumanitiesWriting ENGLISH 800

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