Test your knowledge

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

Keep studying!

Review your answers below to learn more.

Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?

Choose wisely. There is only one correct answer.

You can pay back a payday loan over many years.

Payday loans must be repaid within weeks.

Payday loans and bank loans both offer similar repayment periods.

Payday loans have the longest repayment time.

Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.

A payday loan is designed to _______.

Choose wisely. There is only one correct answer.

Pay off your mortgage

Tide you over until your next paycheck

Provide an open-ended line of credit

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.

Predatory lending can occur with which of the following?

Choose wisely. There is only one correct answer.

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.

How might a payday loan affect your credit report?

Choose wisely. There is only one correct answer.

If you don't pay the loan back, it could get turned over to a debt collector.

You could get sued if you don't pay the loan back.

Small credit reporting agencies might put your payday loan on a credit report.

All of the above

All of the above. The big three credit reporting agencies don't put payday loans on your report, but there are other ways that the loan activity could show up on your report.

What is a typical fee on a payday loan?

Choose wisely. There is only one correct answer.

15%

50%

100%

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

© Copyright 2024 Precision Information, publisher of the Financial Fitness Group family of products. The trade name Financial Fitness Group and the trademarks Financial Fitness CENTER™, Financial Fitness CHECKUP™ and Financial Fitness ACADEMY™ are exclusive marks of Precision Information, LLC. All rights reserved.