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Personal Finance Courses: Predatory Lending

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1.
If you put up a guitar at a pawnshop in return for a loan, what usually happens if you can't pay the loan back?
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The pawnshop can keep the guitar. This is the general rule for how these loans work.
2.
What is a typical fee on a payday loan?
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15%. Fee rates range from 15-20% of the amount borrowed.
3.
How soon after receiving your funds from a payday loan can you spend the money?
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Right away. You may spend the money as soon as you want.
4.
If you are behind on a non-payday loan, why should you talk with the creditors about it?
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They would rather work with you than have to sell your loan to a debt collector. If they sell your loan to a debt collector, they will get very little for it. They WANT to work with you rather than see that happen.
5.
Although people who take out payday loans use them for many different purposes, what is the most common use?
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Regular living expenses. Most borrowers use payday loans for regular living expenses.