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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.
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.
2.
Paying off payday loans on time, every time, is a great way to build up your credit score.
Choose wisely. There is only one correct answer.
True
False
False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.
3.
A payday lender does not legally have to identify the fees charged to your payday loan.
Choose wisely. There is only one correct answer.
True
False
False. By law, a lender must spell out all fees to you in your contract.
4.
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?
Choose wisely. There is only one correct answer.
The pawnshop can keep the guitar.
Nothing
You get an extra week to pay off the loan.
None of the above
The pawnshop can keep the guitar. This is the general rule for how these loans work.
5.
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.
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DONE