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Personal Finance Courses: Predatory Lending

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1.
The interest rates of payday loans are very high.
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True. Payday loans have average annual interest rates of 500 percent--or more.
2.
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?
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The pawnshop can keep the guitar. This is the general rule for how these loans work.
3.
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.
4.
If you roll over a payday loan three times, you will be charged a new fee each time.
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True. You will be charged a new fee for each rollover.
5.
As far as loans go, payday loans are generally small.
Choose wisely. There is only one correct answer.
True. Payday loans are usually $500 or less, making them small.