Test your knowledge

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Predatory lending can be identified by _______.

Choose wisely. There is only one correct answer.

Its high costs

Its low costs

Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.

Which of the following are you forbidden to spend payday loan money on?

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Rent

Other loans

Car repairs

You are not forbidden to spend payday loan money on anything.

You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.

A payday loan is designed to _______.

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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.

A payday lender does not legally have to identify the fees charged to your payday loan.

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True

False

False. By law, a lender must spell out all fees to you in your contract.

What are some things that a payday lender could do if you did not pay back a payday loan you took out?

Choose wisely. There is only one correct answer.

Turn your loan over to a debt collector

Sue you

Repossess your property that you put up as collateral

All of the above

All of the above. All of these are possibilities.

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