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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.
If you don't pay back your payday loan, the lender could take you to court and sue you for it.
Choose wisely. There is only one correct answer.
True
False
True. Legally, the lender can do that if it wants. Of course, all lenders would rather not have to go that route if they can avoid it.
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.
All credit cards are a form of predatory lending.
Choose wisely. There is only one correct answer.
True
False
False. Some credit cards have very high fees and other predatory features, but many of them do not.
4.
How soon after receiving your funds from a payday loan can you spend the money?
Choose wisely. There is only one correct answer.
One week
You must wait until the next morning
You must wait 24 hours for the application to clear
Right away
Right away. You may spend the money as soon as you want.
5.
A payday loan is designed to _______.
Choose wisely. There is only one correct answer.
Pay off your mortgage
Tide you over until your next paycheck
Provide an open-ended line of credit
Tide you over until your next paycheck. A payday loan is set up to pay short-term bills and to be repaid with your next paycheck.
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DONE