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Personal Finance Courses: Predatory Lending

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1.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
Choose wisely. There is only one correct answer.
A loan from a bank or credit union. As a rule, these loans have the lowest interest rates and charge the least amount of interest.
2.
If you have a short-term financial emergency, what is a low-cost way to obtain a loan?
Choose wisely. There is only one correct answer.
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.
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.
4.
A payday loan is designed to _______.
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Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
5.
The interest rates on payday loans are _______.
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Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.