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Personal Finance Courses:
Predatory Lending
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.
1.
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.
2.
You can get a short-term loan from your checking account through what is called _______.
Choose wisely. There is only one correct answer.
Overdraft protection
A checking account loan
A cash advance
Overdraft protection. Overdraft protection simply means overdrawing your checking account. You will likely be charged a fee for it.
3.
As far as loans go, payday loans are generally small.
Choose wisely. There is only one correct answer.
True
False
True. Payday loans are usually $500 or less, making them small.
4.
What is a typical fee on a payday loan?
Choose wisely. There is only one correct answer.
15%
50%
100%
5%
15%. Fee rates range from 15-20% of the amount borrowed.
5.
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.
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