Personal Finance Courses:
Predatory Lending
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1.
Although people who take out payday loans use them for many different purposes, what is the most common use?
Choose wisely. There is only one correct answer.
Regular living expenses
Emergencies
College tuition
None of the above
Regular living expenses. Most borrowers use payday loans for regular living expenses.
2.
What are some things that a payday lender could do if you did not pay back a payday loan you took out?
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Turn your loan over to a debt collector
Sue you
Repossess your property that you put up as collateral
All of the above
All of the above. All of these are possibilities.
3.
A payday lender does not legally have to identify the fees charged to your payday loan.
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True
False
False. By law, a lender must spell out all fees to you in your contract.
4.
All credit cards are a form of predatory lending.
Choose wisely. There is only one correct answer.
True
False
False. Some credit cards have very high fees and other predatory features, but many of them do not.
5.
Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?
Choose wisely. There is only one correct answer.
You can pay back a payday loan over many years.
Payday loans must be repaid within weeks.
Payday loans and bank loans both offer similar repayment periods.
Payday loans have the longest repayment time.
Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
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