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Personal Finance Courses: Predatory Lending

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1.
If you are behind on a non-payday loan, why should you talk with the creditors about it?
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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.
2.
If you roll over a payday loan three times, you will be charged a new fee each time.
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True. You will be charged a new fee for each rollover.
3.
The interest rates of payday loans are very high.
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True. Payday loans have average annual interest rates of 500 percent--or more.
4.
Although people who take out payday loans use them for many different purposes, what is the most common use?
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Regular living expenses. Most borrowers use payday loans for regular living expenses.
5.
Predatory lending can be identified by _______.
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Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.