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Personal Finance Courses: Predatory Lending

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1.
When you take out a payday loan, how long is the grace period for paying it back?
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There is no grace period. Payday loans do not offer grace periods; you must pay them back on your payday or you will be charged late fees.
2.
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.
3.
If you put up a guitar at a pawnshop in return for a loan, what usually happens if you can't pay the loan back?
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The pawnshop can keep the guitar. This is the general rule for how these loans work.
4.
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.
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.