What Is Predatory Lending? Predatory lending typically means imposing unfair, deceptive, or abusive loan terms on borrowers. In many cases, these loans carry high fees and interest rates, strip the borrower of equity, or place a creditworthy borrower in a lower credit-rated (and more expensive) loan, all to the lender’s benefit. Predatory lenders often use
What Is Predatory Pricing? Predatory pricing is the illegal business practice of setting prices for a product unrealistically low in order to eliminate the competition. Predatory pricing violates antitrust laws, as its goal is to create a monopoly. However, the practice can be difficult to prosecute. Defendants may argue that lowering prices is a normal
What Is Pre-Depreciation Profit? Pre-depreciation profit includes earnings that are calculated prior to non-cash expenses. Non-cash expenses appear as separate income statement expense line items, but no actual cash is spent on these items. Some common non-cash expenses are depreciation, amortization, depletion, stock-based compensation, and asset impairments. Pre-depreciation profit is a company’s profit before writing
What Is Predictive Modeling? Predictive modeling uses known results to create, process, and validate a model that can be used to forecast future outcomes. It is a tool used in predictive analytics, a data mining technique that attempts to answer the question, “what might happen in the future?” Key Takeaways Predictive modeling uses known results to
What Are Pre-Disability Earnings? Pre-disability earnings are the amount of qualifying income that a disability insurance policyholder was earning before an injury. Pre-disability earnings are used to calculate how much disability income a policyholder will qualify for in the case of an injury. An injury may prevent the policyholder from working at all or prevent
What Is a Preexisting Condition? Preexisting condition is a term that refers to a known illness, injury, or health condition that existed before someone enrolls in or begins receiving health or life insurance. This includes illnesses such as heart disease, diabetes, cancer, and asthma. The majority of these conditions are generally considered to be long
What Is the Pre-existing Condition Exclusion Period? The pre-existing condition exclusion period is a health insurance provision that limits or excludes benefits for a period of time. The determination is based on the policyholder having a medical condition prior to enrolling in a health plan. The Affordable Care Act (ACA) drastically curtailed pre-existing exclusion periods
What Are Preference Shares? Preference shares, more commonly referred to as preferred stock, are shares of a company’s stock with dividends that are paid out to shareholders before common stock dividends are issued. If the company enters bankruptcy, preferred stockholders are entitled to be paid from company assets before common stockholders. Most preference shares have
What Is Preferred Debt? Preferred debt is a financial obligation that is considered more important than–or make take priority over–other types of debt. For example, the first–or senior–mortgage would be considered preferred debt (when comparing the first and second mortgage). This form of debt obligation typically has to be paid first because it carries more
What Is Preferred Auto Coverage? Preferred auto insurance is offered to drivers considered to fall into the lowest risk profile. This takes into account the driver’s characteristics, and is offered to drivers considered the least likely to file a benefits claim. These drivers pay the lowest premiums for coverage, lower than those for drivers with
