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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.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
Choose wisely. There is only one correct answer.
True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.
3.
Which of the following are you forbidden to spend payday loan money on?
Choose wisely. There is only one correct answer.
You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.
4.
Although people who take out payday loans use them for many different purposes, what is the most common use?
Choose wisely. There is only one correct answer.
Regular living expenses. Most borrowers use payday loans for regular living expenses.
5.
All credit cards are a form of predatory lending.
Choose wisely. There is only one correct answer.
False. Some credit cards have very high fees and other predatory features, but many of them do not.