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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.
As a general rule, which of the following will charge the LEAST amount of interest if you take out a loan?
Choose wisely. There is only one correct answer.
A payday lender
A credit card
A credit card cash advance
A loan from a bank or credit union
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.
2.
The interest rates on payday loans are _______.
Choose wisely. There is only one correct answer.
Higher than those of banks or credit unions
Lower than those of banks or credit unions
Normal
Higher than those of banks or credit unions. Interest rates on payday loans are generally much higher than those of other loans.
3.
Which of the following are you forbidden to spend payday loan money on?
Choose wisely. There is only one correct answer.
Rent
Other loans
Car repairs
You are not forbidden to spend payday loan money on anything.
You are not forbidden to spend payday loan money on anything. There are no restrictions on what you can spend payday loan money on.
4.
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.
5.
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.
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