Test your knowledge

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It is possible to pay more in fees on a payday loan than the amount you originally borrowed.

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True

False

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.

If you have a short-term financial emergency, what is a low-cost way to obtain a loan?

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Payday loan

Emergency credit union loan

Credit card

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.

Predatory lending can be identified by _______.

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Its high costs

Its low costs

Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.

What do borrowers use payday loans for?

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Medical emergencies

Regular bills

As an alternative to other loans

All of the above

All of the above. People take out payday loans for many different reasons.

To qualify for a payday loan, what must your income be?

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$100 per week

$300 per week

There is no minimum.

There is no minimum. You just need to earn sufficient money to cover the loan.

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