Test your knowledge

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A payday lender does not legally have to identify the fees charged to your payday loan.

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True

False

False. By law, a lender must spell out all fees to you in your contract.

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.

Predatory lending can occur with which of the following?

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Tax refunds

Payday loans

Rent-to-own stores

All of the above

All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.

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.

The interest rates of payday loans are very high.

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True

False

True. Payday loans have average annual interest rates of 500 percent--or more.

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