Predatory Lending

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Spot Predatory Lending and Use Smart Alternatives

It is the first of the month, your bank account is nearly empty, and rent is due. Desperate, you turn to a payday lender for a quick loan until payday. But then your car breaks down, and suddenly you are borrowing again, digging deeper into debt. This scenario plays out for millions of Americans every year. The good news? You can avoid turning a tough situation into a financial disaster. 

How to recognize predatory financial services, understand how they operate and choose better solutions

Payday loans are a predatory pitfall

Payday loans, for example, are promoted as quick fixes, no credit checks, instant cash, but the reality is far harsher. With annual percentage rates (APRs) ranging from 300 to 800%, these short-term loans can quickly spiral out of control. According to the Consumer Financial Protection Bureau, over 80% of payday loans are reborrowed within a month, and one in four borrowers reborrow 9 or more times. Borrowers often end up paying more in fees than they initially borrowed.

Predatory lenders promise quick relief but keep borrowers trapped in cycles of debt

Payday lenders profit when customers are unable to repay their loans. They target people who may not have access to traditional financial institutions and often lure them in with additional services, such as check cashing, for hefty fees. Cashing a $1,000 paycheck could cost $50 or more each time, adding up to over $1,300 a year. By contrast, credit unions typically let members cash checks for free and offer the convenience of direct deposit.

Pawn shops are another predatory risk

Pawn shops offer quick loans against personal items like jewelry or electronics, but with high interest and short repayment windows, usually 30 to 90 days. If you cannot repay on time, they will either extend the loan for extra fees or sell your valuables. In a 2019 survey, 73% of pawn borrowers still owed money six months later.

Car title loans can leave you stranded

Car title loans are similar because they use your car as collateral. Title loan lenders rarely verify income or credit; they do not need to, because if you default, they take your car. Many own dealerships, meaning they profit from both your payments and the resale of your vehicle.

Rent-to-own stores may seem harmless but can be just as predatory

Paying $30 a week for a couch might sound affordable, until you realize that the same $600 couch could cost you $2,000 by the end of the contract. With effective APRs ranging from 43 to 468%, rent-to-own agreements charge far more than a traditional purchase or even a credit card.

Even housing can fall into the predatory trap

“Rent-to-own” or contract mortgages often target people who cannot qualify for traditional loans. These deals typically include high interest rates, balloon payments and strict terms. Miss a payment or break a rule, and you lose both the home and every dollar you have invested.


If you need emergency cash, a personal loan from a credit union is a far safer choice. You will get better rates, longer repayment periods and transparent terms. Credit unions, like Ascentra, even offer loans, such as “CashNOW” of up to $2,000 without a credit check. These loans are reported to credit bureaus, helping you build credit as you repay.

A credit union offers fair loans, financial coaching and long-term solutions to help you build stability and wealth. When money is tight, it is tempting to use the first lifeline offered, but not all lifelines lead to safety. Many are anchors that pull you deeper into debt. With the right financial partner and a solid plan, you can stay afloat, regain control and steer toward the financial future you deserve.


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Encourage Your Student to Apply for Scholarships!

  • Jan 27, 2026

Parents, did you know that the rising cost of education (tuition, housing, books and everyday living expenses) is the top concern for today’s graduating high school and continuing education students?Scholarships, like the ones offered by the Ascentra Scholarship Program, are one of the most effective tools to ease their burden, yet many students never apply because they assume they won’t qualify. The truth is, applying for scholarships can profoundly shape your student’s future, and your encouragement plays a major role.Scholarships don’t just reduce the price of college; they reduce stress! Students today often balance full schedules and multiple jobs, which can limit study time, create burnout and affect grades. Even one or two modest scholarships can cut back the hours they need to work, giving them more time to focus on classes, extracurriculars and opportunities that build confidence and career readiness.

Importantly, scholarships also protect both your student’s and your family’s financial future. Every award they secure is money they don’t need to borrow. Over four years, even small scholarships can translate into thousands of dollars saved in interest, giving your student a stronger start after graduation.

What many families don’t realize is that many scholarships go unclaimed each year due to low application numbers. Local organizations, community groups, employers and associations often receive far fewer applicants than expected. That means your student’s chances may be much higher than they think.

Encourage your student to apply early, often and widely. Treat scholarship applications like part-time work that pays off not just this year, but for years to come. Scholarships aren’t just financial help, they are an investment in your student’s success, stability and future freedom.

Ascentra’s Scholarship Program offers fifteen $1,000 scholarships to high school graduates, undergraduates, trade and vocational students each year.

Students can easily apply online by visiting Ascentra.org/scholarships.

Deadline: March 31, 2026

$1,000 scholarships go to:

  • High school student members planning to enter college
  • Non-traditional student members aged 19+ attending higher education.
  • Student members entering vocational school or a college with a trade program

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Encourage Your Student to Apply for Scholarships!

  • Jan 27, 2026

Parents, did you know that the rising cost of education (tuition, housing, books and everyday living expenses) is the top concern for today’s graduating high school and continuing education students?Scholarships, like the ones offered by the Ascentra Scholarship Program, are one of the most effective tools to ease their burden, yet many students never apply because they assume they won’t qualify. The truth is, applying for scholarships can profoundly shape your student’s future, and your encouragement plays a major role.Scholarships don’t just reduce the price of college; they reduce stress! Students today often balance full schedules and multiple jobs, which can limit study time, create burnout and affect grades. Even one or two modest scholarships can cut back the hours they need to work, giving them more time to focus on classes, extracurriculars and opportunities that build confidence and career readiness.

Importantly, scholarships also protect both your student’s and your family’s financial future. Every award they secure is money they don’t need to borrow. Over four years, even small scholarships can translate into thousands of dollars saved in interest, giving your student a stronger start after graduation.

What many families don’t realize is that many scholarships go unclaimed each year due to low application numbers. Local organizations, community groups, employers and associations often receive far fewer applicants than expected. That means your student’s chances may be much higher than they think.

Encourage your student to apply early, often and widely. Treat scholarship applications like part-time work that pays off not just this year, but for years to come. Scholarships aren’t just financial help, they are an investment in your student’s success, stability and future freedom.

Ascentra’s Scholarship Program offers fifteen $1,000 scholarships to high school graduates, undergraduates, trade and vocational students each year.

Students can easily apply online by visiting Ascentra.org/scholarships.

Deadline: March 31, 2026

$1,000 scholarships go to:

  • High school student members planning to enter college
  • Non-traditional student members aged 19+ attending higher education.
  • Student members entering vocational school or a college with a trade program