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Predatory Lending
Test your knowledge
Choose wisely. There is only one correct answer to each question.
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1.
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.
2.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
Pay off your mortgage
Tide you over until your next paycheck
Provide an open-ended line of credit
Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
3.
Predatory lending can be identified by _______.
Choose wisely. There is only one correct answer.
Its high costs
Its low costs
Its high costs. Predatory lending involves a business charging higher-than-normal costs of various kinds.
4.
Which of these lenders requires little or no credit check when loaning money to a borrower?
Choose wisely. There is only one correct answer.
Payday lender
Bank
P2P lender
Payday lender. Payday loans are fast and usually don't require a credit check.
5.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
Choose wisely. There is only one correct answer.
True
False
True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.
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