Test your knowledge

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What are some things that a payday lender could do if you did not pay back a payday loan you took out?

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Turn your loan over to a debt collector

Sue you

Repossess your property that you put up as collateral

All of the above

All of the above. All of these are possibilities.

The interest rates on payday loans are _______.

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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.

A payday lender does not legally have to identify the fees charged to your payday loan.

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True

False

False. By law, a lender must spell out all fees to you in your contract.

Which of these lenders requires little or no credit check when loaning money to a borrower?

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Payday lender

Bank

P2P lender

Payday lender. Payday loans are fast and usually don't require a credit check.

When you take out a payday loan, how long is the grace period for paying it back?

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Two weeks

One month

Two months

There is no grace period.

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.

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