Test your knowledge

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Predatory lending can be identified by _______.

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Its high costs

Its low costs

Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.

What are some things that a payday lender could do if you did not pay back a payday loan you took out?

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Turn your loan over to a debt collector

Sue you

Repossess your property that you put up as collateral

All of the above

All of the above. All of these are possibilities.

A payday lender does not legally have to identify the fees charged to your payday loan.

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True

False

False. By law, a lender must spell out all fees to you in your contract.

The interest rates of payday loans are very high.

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True

False

True. Payday loans have average annual interest rates of 500 percent--or more.

How long do most payday loans last?

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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.

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