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Personal Finance Courses: Predatory Lending

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1.
Predatory lending can be identified by _______.
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Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.
2.
When you take out a payday loan, how long is the grace period for paying it back?
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There is no grace period. Payday loans do not offer grace periods; you must pay them back on your payday or you will be charged late fees.
3.
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.
4.
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.
5.
It is possible to pay more in fees on a payday loan than the amount you originally borrowed.
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True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.