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Personal Finance Courses: Predatory Lending

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1.
Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?
Choose wisely. There is only one correct answer.
Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
2.
If you are behind on a non-payday loan, why should you talk with the creditors about it?
Choose wisely. There is only one correct answer.
They would rather work with you than have to sell your loan to a debt collector. If they sell your loan to a debt collector, they will get very little for it. They WANT to work with you rather than see that happen.
3.
If you take out $1000 from a payday lender, a credit card, and a credit card cash advance, which will charge the most interest?
Choose wisely. There is only one correct answer.
The payday lender. By far, the payday lender will charge the most interest. The dollar amount difference between it and the credit cards will be immense. It should be noted that there are also options that are even lower in interest than the credit cards.
4.
Although people who take out payday loans use them for many different purposes, what is the most common use?
Choose wisely. There is only one correct answer.
Regular living expenses. Most borrowers use payday loans for regular living expenses.
5.
The interest rates on payday loans are _______.
Choose wisely. There is only one correct answer.
Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.