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Predatory Lending
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
Predatory lending can be identified by _______.
Choose wisely. There is only one correct answer.
Its high costs
Its low costs
Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.
2.
What are some things that a payday lender could do if you did not pay back a payday loan you took out?
Choose wisely. There is only one correct answer.
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.
3.
How good does your credit need to be in order for you to take out a payday loan?
Choose wisely. There is only one correct answer.
Excellent
Very good
Average
It doesn't need to be good
It doesn't need to be good. You don't need good credit in order to get a payday loan. Many borrowers do not have good credit.
4.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
Pay off your mortgage
Tide you over until your next paycheck
Provide an open-ended line of credit
Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
5.
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 payday lender
A credit card
A credit card cash advance
A loan from a bank or credit union
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.
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