In what scenarios might a loan be considered "high-cost"?

A loan is considered "high-cost" primarily when its Annual Percentage Rate (APR) exceeds the average of comparable loans. This classification is significant because it triggers certain regulations and protections for consumers, such as the Home Ownership and Equity Protection Act (HOEPA) requirements.

Essentially, a higher APR indicates that the cost of borrowing is greater than what is typically found in the market for similar loans, often highlighting increased risk for the borrower. Such loans may involve higher fees, more stringent repayment terms, or predatory lending practices. This distinction is critical for both consumers and lenders, as it influences the level of scrutiny and the responsibilities imposed on lending institutions to ensure fair practices.

Other options do not meet the criteria for defining a "high-cost" loan, as a low interest rate or a loan with no fees would not indicate elevated borrowing costs, and a high income of the borrower does not inherently relate to the cost analysis of the loan itself.