Loan Flipping.
In plain English
Loan flipping is a predatory tactic where a lender pressures you to refinance the same loan over and over, mainly so they can charge fresh fees and costs each time. Each refinance can roll old fees into the new balance, reset the loan term, and strip away any equity or progress you had made. It is most common with high-cost installment loans, title loans, and some home loans. The borrower ends up paying more and more in fees while the principal barely moves, which is why it is treated as a form of predatory lending.
01Why it matters
Each flip quietly adds fees onto your balance and resets the clock, so over years you can pay thousands extra without your debt shrinking, and on a home loan it can eat the equity you spent years building.
02The math, step by step
A lender calls every few months offering to refinance your installment loan into a slightly lower payment. Each time, they fold in new origination and processing fees. After several flips, you have paid hundreds in fees, your balance is higher than where you started, and you are no closer to being done. A straightforward sign of trouble is a lender who keeps urging you to refinance rather than simply pay the loan off.
03What this is NOT
A genuine refinance is meant to lower your rate or payment in a way that actually saves you money. Loan flipping looks similar but exists to generate fees, not to help you, and it usually leaves your balance higher. The test is whether each refinance truly improves your position or just stacks on new costs.
04Receipts
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Plain-English answers from our glossary. Receipts included. Never advice.
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