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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.
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.
2.
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.
3.
Predatory lending can occur with which of the following?
Choose wisely. There is only one correct answer.
Tax refunds
Payday loans
Rent-to-own stores
All of the above
All of the above. All of these and many more can be involved in predatory lending. You should evaluate all of them carefully.
4.
Paying off payday loans on time, every time, is a great way to build up your credit score.
Choose wisely. There is only one correct answer.
True
False
False. Payday lenders do not report your borrowing activity to the three big credit bureaus, so the activity will not influence your credit score.
5.
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.
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DONE