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Personal Finance Courses: Predatory Lending

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1.
The interest rates on payday loans are _______.
Choose wisely. There is only one correct answer.
Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.
2.
You can get a short-term loan from your checking account through what is called _______.
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Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
3.
The interest rates of payday loans are very high.
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True. Payday loans have average annual interest rates of 500 percent--or more.
4.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
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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.
5.
As far as loans go, payday loans are generally small.
Choose wisely. There is only one correct answer.
True. Payday loans are usually $500 or less, making them small.