Test your knowledge

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

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If you don't pay back your payday loan, the lender could take you to court and sue you for it.

Choose wisely. There is only one correct answer.

True

False

True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.

The interest rates on payday loans are _______.

Choose wisely. There is only one correct answer.

Higher than those of banks or credit unions

Lower than those of banks or credit unions

Normal

Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.

How soon after receiving your funds from a payday loan can you spend the money?

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One week

You must wait until the next morning

You must wait 24 hours for the application to clear

Right away

Right away. You may spend the money as soon as you want.

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 payday lender

A credit card

A credit card cash advance

A loan from a bank or credit union

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.

As far as loans go, payday loans are generally small.

Choose wisely. There is only one correct answer.

True

False

True. Payday loans are usually $500 or less, making them small.

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