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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

False

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.

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.

If you put up a guitar at a pawnshop in return for a loan, what usually happens if you can't pay the loan back?

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The pawnshop can keep the guitar.

Nothing

You get an extra week to pay off the loan.

None of the above

The pawnshop can keep the guitar. This is the general rule for how these loans work.

If you roll over a payday loan three times, you will be charged a new fee each time.

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True

False

True. You will be charged a new fee for each rollover.

When you take out a payday loan, how long is the grace period for paying it back?

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Two weeks

One month

Two months

There is no grace period.

There is no grace period. Payday loans do not offer grace periods; you must pay them back on your payday or you will be charged late fees.

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