what is an unlawful loan 
an unlawful loan is a loan that fails to comply with or contravenes any provision of prevailing lending laws examples of unlawful loans include loans or credit accounts with excessively high interest rates or ones that exceed the legal size limits that a lender is permitted to extend an unlawful loan may also be some form of credit or loan that disguises its true cost or fails to disclose relevant terms regarding the debt or information about the lender this sort of loan is in violation of the truth in lending act tila understanding an unlawful loanthe term unlawful loan is a broad one as a number of different laws and legislation can apply to borrowing and borrowers basically though an unlawful loan violates the laws of a geographic jurisdiction an industry or government authority or agency for example the federal direct loan program administered by the department of education offers government backed loans to postsecondary students it sets limits on how much can be borrowed each year based on what the student s college or university identifies as educational expenses 1