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Personal Finance Courses: Predatory Lending

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1.
What do borrowers use payday loans for?
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All of the above. People take out payday loans for many different reasons.
2.
The interest rates of payday loans are very high.
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True. Payday loans have average annual interest rates of 500 percent--or more.
3.
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.
4.
If you put up your car as collateral for a car title loan, what happens to your car if you pay the loan back?
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You retain ownership of your car. As long as you pay the loan back, you legally must get your car back.
5.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
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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.