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Personal Finance Courses: Predatory Lending

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1.
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.
2.
Predatory lending can occur with which of the following?
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All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.
3.
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.
4.
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.
5.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
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True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.