Test your knowledge

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You can get a short-term loan from your checking account through what is called _______.

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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.

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.

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.

Which of these lenders requires little or no credit check when loaning money to a borrower?

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Payday lender

Bank

P2P lender

Payday lender. Payday loans are fast and usually don't require a credit check.

If you put up your car as collateral for a car title loan, what happens to your car if you pay the loan back?

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The lender can still keep the car

You retain ownership of your car

Nothing

None of the above

You retain ownership of your car. As long as you pay the loan back, you legally must get your car back.

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