high-cost loans

High-cost loans are loans that come with significantly higher interest rates and fees compared to standard loans. They are often used by borrowers with poor credit or urgent financial needs. These loans tend to have unfavorable terms, making repayment more expensive over time. The goal of such loans is to provide quick access to funds, but they can lead to a cycle of debt due to their high costs. Regulations, such as the Dodd-Frank Act, are designed to protect consumers from excessively costly lending practices.