Packing is the practice of adding costly unwanted extra items to a loan contract. A common example is credit insurance such as credit life and disability benefits and coverage in the event of unemployment. These premiums are very high and are then financed at high interest rates, which makes their cost even higher. Packing is a common characteristic of high-cost predatory loans. Loan officers often receive generous commissions for the sale of credit insurance and have a strong incentive to pack loans with as many extras as possible.
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