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Personal Finance Courses: Predatory Lending

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1.
You can get a short-term loan from your checking account through what is called _______.
Choose wisely. There is only one correct answer.
Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
2.
What do borrowers use payday loans for?
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All of the above. People take out payday loans for many different reasons.
3.
Predatory lending can occur with which of the following?
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All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.
4.
Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?
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Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
5.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
Choose wisely. There is only one correct answer.
True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.