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Personal Finance Courses: Predatory Lending

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1.
If you take out $1000 from a payday lender, a credit card, and a credit card cash advance, which will charge the most interest?
Choose wisely. There is only one correct answer.
The payday lender. By far, the payday lender will charge the most interest. The dollar amount difference between it and the credit cards will be immense. It should be noted that there are also options that are even lower in interest than the credit cards.
2.
How long do most payday loans last?
Choose wisely. There is only one correct answer.
Two weeks. Most payday loans last about the length of a pay period, which is two weeks.
3.
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. 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.
4.
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.
Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
5.
The interest rates on payday loans are _______.
Choose wisely. There is only one correct answer.
Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.