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Personal Finance Courses: Predatory Lending

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1.
You can get a short-term loan from your checking account through what is called _______.
Choose wisely. There is only one correct answer.
Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
2.
Paying off payday loans on time, every time, is a great way to build up your credit score.
Choose wisely. There is only one correct answer.
False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.
3.
A payday lender does not legally have to identify the fees charged to your payday loan.
Choose wisely. There is only one correct answer.
False. By law, a lender must spell out all fees to you in your contract.
4.
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?
Choose wisely. There is only one correct answer.
The pawnshop can keep the guitar. This is the general rule for how these loans work.
5.
How long do most payday loans last?
Choose wisely. There is only one correct answer.
Two weeks. Most payday loans last about the length of a pay period, which is two weeks.