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Personal Finance Courses:
Predatory Lending
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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Review your answers below to learn more.
1.
How long do most payday loans last?
Choose wisely. There is only one correct answer.
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.
2.
If you roll over a payday loan three times, you will be charged a new fee each time.
Choose wisely. There is only one correct answer.
True
False
True. You will be charged a new fee for each rollover.
3.
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.
4.
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
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.
5.
Which of the following are you forbidden to spend payday loan money on?
Choose wisely. There is only one correct answer.
Rent
Other loans
Car repairs
You are not forbidden to spend payday loan money on anything.
You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.
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