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Personal Finance Courses: Predatory Lending

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1.
What is a typical fee on a payday loan?
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15%. Fee rates range from 15-20% of the amount borrowed.
2.
How good does your credit need to be in order for you to take out a payday loan?
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It doesn't need to be good. You don't need good credit in order to get a payday loan. Many borrowers do not have good credit.
3.
As far as loans go, payday loans are generally small.
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True. Payday loans are usually $500 or less, making them small.
4.
The interest rates on payday loans are _______.
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Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.
5.
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. 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.