Spot the loan trap before you sign

Most bad loans hide the same way: a small monthly or weekly number that pulls your eye away from the total you actually pay. The honest comparison is always total paid versus the sticker price, and the real rate behind it. A handful of patterns cover almost every trap.

• Long car notes. An 84-month loan with a low payment can leave you owing more than the car is worth for years.
• Deferred interest store cards. Miss the payoff date by a day and interest applies back to day one on the full balance.
• Payday loans. A $15 fee per $100 borrowed for two weeks works out to roughly 390% APR.
• Rent to own. The weekly number is the bait. The total can run several times the sticker price.
• Title loans. Borrowing against your car can cost about 300% a year, and the lender can take the car.
• The fair deal. A clear rate, a real term, and no prepayment penalty. Those exist too.

Payday and title loan APR framing per the Consumer Financial Protection Bureau. Offers here are illustrative for the game, not specific products, and this is education, not advice.