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Personal Finance Courses: Predatory Lending

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1.
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.
2.
To qualify for a payday loan, what must your income be?
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There is no minimum. You just need to earn sufficient money to cover the loan.
3.
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.
4.
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.
5.
If you have a short-term financial emergency, what is a low-cost way to obtain a loan?
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Emergency credit union loan. Many credit unions and banks offer relatively low-interest short-term loans that can help tide you over a short-term financial emergency.