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Personal Finance Courses: Predatory Lending

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1.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
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.
2.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
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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.
3.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
Choose wisely. There is only one correct answer.
True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.
4.
The interest rates on payday loans are _______.
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Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.
5.
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.
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.