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Personal Finance Courses: Predatory Lending

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1.
If you put up your car as collateral for a car title loan, what happens to your car if you pay the loan back?
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You retain ownership of your car. As long as you pay the loan back, you legally must get your car back.
2.
If you have a short-term financial emergency, what is a low-cost way to obtain a loan?
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Emergency credit union loan. Many credit unions and banks offer relatively low-interest short-term loans that can help tide you over a short-term financial emergency.
3.
Although people who take out payday loans use them for many different purposes, what is the most common use?
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Regular living expenses. Most borrowers use payday loans for regular living expenses.
4.
The interest rates of payday loans are very high.
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True. Payday loans have average annual interest rates of 500 percent--or more.
5.
What is a typical fee on a payday loan?
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15%. Fee rates range from 15-20% of the amount borrowed.