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Personal Finance Courses: Predatory Lending

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1.
Paying off payday loans on time, every time, is a great way to build up your credit score.
Choose wisely. There is only one correct answer.
False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.
2.
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.
3.
When you take out a payday loan, how long is the grace period for paying it back?
Choose wisely. There is only one correct answer.
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.
4.
If you are behind on a non-payday loan, why should you talk with the creditors about it?
Choose wisely. There is only one correct answer.
They would rather work with you than have to sell your loan to a debt collector. If they sell your loan to a debt collector, they will get very little for it. They WANT to work with you rather than see that happen.
5.
If you put up a guitar at a pawnshop in return for a loan, what usually happens if you can't pay the loan back?
Choose wisely. There is only one correct answer.
The pawnshop can keep the guitar. This is the general rule for how these loans work.