What term refers to the act of lending money at an exorbitant rate?

The term that refers to the act of lending money at an exorbitant rate is known as usury. Usury specifically denotes the practice of charging excessively high interest rates on loans, which often leads borrowers into financial distress. This term has historical significance and is rooted in various legal and ethical considerations regarding fair lending practices.

While loan sharking can also involve charging exorbitant rates and refers to illegal lending practices, usury is a broader term that encompasses both legal and illegal lending scenarios where interest rates exceed what is considered reasonable or permissible. Interest itself is simply the cost of borrowing money and does not imply the nature of the rate being fair or exorbitant.

The term debt trap describes a situation where a borrower is unable to escape from debt due to the ongoing accumulation of interest and fees, which can be a consequence of usury, but it does not specifically refer to the act of lending at high rates.