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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.
What is a typical fee on a payday loan?
Choose wisely. There is only one correct answer.
15%
50%
100%
5%
15%. Fee rates range from 15-20% of the amount borrowed.
2.
To qualify for a payday loan, what must your income be?
Choose wisely. There is only one correct answer.
$100 per week
$300 per week
There is no minimum.
There is no minimum. You just need to earn sufficient money to cover the loan.
3.
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.
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.
What do borrowers use payday loans for?
Choose wisely. There is only one correct answer.
Medical emergencies
Regular bills
As an alternative to other loans
All of the above
All of the above. People take out payday loans for many different reasons.
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DONE