Test your knowledge

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1.
A payday loan is designed to _______.
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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.
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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All of the above. All of these are possibilities.
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.
What is a typical fee on a payday loan?
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15%. Fee rates range from 15-20% of the amount borrowed.
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.