Personal Finance Courses: Predatory Lending

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Choose wisely. There is only one correct answer to each question.

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1.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
2.
If you have a short-term financial emergency, what is a low-cost way to obtain a loan?
Choose wisely. There is only one correct answer.
Emergency credit union loan. Many credit unions and banks offer relatively low-interest short-term loans that can help tide you over a short-term financial emergency.
3.
How soon after receiving your funds from a payday loan can you spend the money?
Choose wisely. There is only one correct answer.
Right away. You may spend the money as soon as you want.
4.
The interest rates on payday loans are _______.
Choose wisely. There is only one correct answer.
Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.
5.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
Choose wisely. There is only one correct answer.
A loan from a bank or credit union. As a rule, these loans have the lowest interest rates and charge the least amount of interest.