Test your knowledge

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Keep studying!

Review your answers below to learn more.

You can get a short-term loan from your checking account through what is called _______.

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Overdraft protection

A checking account loan

A cash advance

Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.

How long do most payday loans last?

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A year

A month

Two months

Two weeks

Two weeks. Most payday loans last about the length of a pay period, which is two weeks.

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.

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.

The interest rates on payday loans are _______.

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Higher than those of banks or credit unions

Lower than those of banks or credit unions

Normal

Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.

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