Basics Beginner: Predatory Lending

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1.
How good does your credit need to be in order for you to take out a payday loan?
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It doesn't need to be good. You don't need good credit in order to get a payday loan. Many borrowers do not have good credit.
2.
A payday lender does not legally have to identify the fees charged to your payday loan.
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False. By law, a lender must spell out all fees to you in your contract.
3.
If you put up a guitar at a pawnshop in return for a loan, what usually happens if you can't pay the loan back?
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The pawnshop can keep the guitar. This is the general rule for how these loans work.
4.
If you have a short-term financial emergency, what is a low-cost way to obtain a loan?
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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.
5.
Although people who take out payday loans use them for many different purposes, what is the most common use?
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Regular living expenses. Most borrowers use payday loans for regular living expenses.