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Personal Finance Courses:
Predatory Lending
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
Predatory lending can be identified by _______.
Choose wisely. There is only one correct answer.
Its high costs
Its low costs
Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.
2.
Which of the following are you forbidden to spend payday loan money on?
Choose wisely. There is only one correct answer.
Rent
Other loans
Car repairs
You are not forbidden to spend payday loan money on anything.
You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.
3.
As far as loans go, payday loans are generally small.
Choose wisely. There is only one correct answer.
True
False
True. Payday loans are usually $500 or less, making them small.
4.
You can get a short-term loan from your checking account through what is called _______.
Choose wisely. There is only one correct answer.
Overdraft protection
A checking account loan
A cash advance
Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
5.
What is a typical fee on a payday loan?
Choose wisely. There is only one correct answer.
15%
50%
100%
5%
15%. Fee rates range from 15-20% of the amount borrowed.
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