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Personal Finance Courses: Predatory Lending

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1.
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.
2.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
Choose wisely. There is only one correct answer.
True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.
3.
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.
4.
Which of these lenders requires little or no credit check when loaning money to a borrower?
Choose wisely. There is only one correct answer.
Payday lender. Payday loans are fast and usually don't require a credit check.
5.
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?
Choose wisely. There is only one correct answer.
The pawnshop can keep the guitar. This is the general rule for how these loans work.