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Definition of 'Usury'

Usury is the practice of lending money at an unreasonably high interest rate. The term is derived from the Latin word "usura," which means "interest." Usury is considered to be a form of exploitation, and it is illegal in most countries.

There are a number of reasons why usury is considered to be unethical. First, it can trap borrowers in a cycle of debt. When borrowers are forced to pay high interest rates, they may not be able to afford to repay their loans. This can lead to them defaulting on their loans, which can damage their credit and make it difficult for them to borrow money in the future. Second, usury can lead to predatory lending practices. Predatory lenders target vulnerable borrowers, such as those with poor credit histories or low incomes. They may charge borrowers high interest rates and fees, and they may make it difficult for borrowers to understand the terms of their loans. Third, usury can have a negative impact on the economy. When borrowers are forced to pay high interest rates, they have less money to spend on other goods and services. This can slow down economic growth.

There are a number of laws that are designed to protect borrowers from usury. In the United States, the usury rate is set by each state. The usury rate is the maximum interest rate that a lender can charge. If a lender charges a higher interest rate, the borrower may be able to sue the lender for usury.

Despite the laws against usury, it still occurs. There are a number of reasons why usury continues to exist. First, some lenders are willing to take the risk of breaking the law in order to make a profit. Second, some borrowers are desperate for money and are willing to pay high interest rates in order to get a loan. Third, some lenders target vulnerable borrowers who may not be aware of their rights or who may not be able to afford to fight back against usury.

If you are considering borrowing money, it is important to be aware of the risks of usury. Be sure to compare interest rates from different lenders before you borrow money. You should also read the terms of your loan carefully before you sign it. If you think that you are being charged usurious interest rates, you should contact the Consumer Financial Protection Bureau (CFPB).

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