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Personal Finance Courses: Predatory Lending

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1.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
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True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.
2.
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.
3.
What is a typical fee on a payday loan?
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15%. Fee rates range from 15-20% of the amount borrowed.
4.
How good does your credit need to be in order for you to take out a payday loan?
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It doesn't need to be good. You don't need good credit in order to get a payday loan. Many borrowers do not have good credit.
5.
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.