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.

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.

How might a payday loan affect your credit report?

Choose wisely. There is only one correct answer.

If you don't pay the loan back, it could get turned over to a debt collector.

You could get sued if you don't pay the loan back.

Small credit reporting agencies might put your payday loan on a credit report.

All of the above

All of the above. The big three credit reporting agencies don't put payday loans on your report, but there are other ways that the loan activity could show up on your report.

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.

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.

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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