Test your knowledge

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The interest rates on payday loans are _______.

Choose wisely. There is only one correct answer.

Higher than those of banks or credit unions

Lower than those of banks or credit unions

Normal

Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.

How soon after receiving your funds from a payday loan can you spend the money?

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One week

You must wait until the next morning

You must wait 24 hours for the application to clear

Right away

Right away. You may spend the money as soon as you want.

You can get a short-term loan from your checking account through what is called _______.

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Overdraft protection

A checking account loan

A cash advance

Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.

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.

How long do most payday loans last?

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A year

A month

Two months

Two weeks

Two weeks. Most payday loans last about the length of a pay period, which is two weeks.

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