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Personal Finance Courses: Predatory Lending

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1.
Which of the following best describes how payday loans differ from bank and peer-to-peer (P2P) loans in terms of repayment time?
Choose wisely. There is only one correct answer.
Payday loans must be repaid within weeks. Banks and P2P platforms let you take much longer to pay loans back.
2.
When you take out a payday loan, how long is the grace period for paying it back?
Choose wisely. There is only one correct answer.
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.
3.
Predatory lending can occur with which of the following?
Choose wisely. There is only one correct answer.
All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.
4.
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.
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 loan from a bank or credit union. As a rule, these loans have the lowest interest rates and charge the least amount of interest.