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

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.

Which of the following are you forbidden to spend payday loan money on?

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.

How long do most payday loans last?

A year

A month

Two months

Two weeks

Two weeks. Most payday loans last about the length of a pay period, which is two weeks.

How might a payday loan affect your credit report?

If you don't pay the loan back, it could get turned over to a debt collector.

You could get sued if you don't pay the loan back.

Small credit reporting agencies might put your payday loan on a credit report.

All of the above

All of the above. The big three credit reporting agencies don't put payday loans on your report, but there are other ways that the loan activity could show up on your report.

The interest rates on payday loans are _______.

Higher than those of banks or credit unions

Lower than those of banks or credit unions

Normal

Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.