Test your knowledge

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

Keep studying!

Review your answers below to learn more.

What is a typical fee on a payday loan?

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15%

50%

100%

15%. Fee rates range from 15-20% of the amount borrowed.

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

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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.

Paying off payday loans on time, every time, is a great way to build up your credit score.

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True

False

False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.

Predatory lending can occur with which of the following?

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Tax refunds

Payday loans

Rent-to-own stores

All of the above

All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.

What do borrowers use payday loans for?

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Medical emergencies

Regular bills

As an alternative to other loans

All of the above

All of the above. People take out payday loans for many different reasons.

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