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The interest rates of payday loans are very high.

True

False

True. Payday loans have average annual interest rates of 500 percent--or more.

It is possible to pay more in fees on a payday loan than the amount you originally borrowed.

True

False

True. If you extend the loan or take out a different one to cover it, and you did this several times in a row, you might actually pay more in interest than the actual loan itself.

What do borrowers use payday loans for?

Medical emergencies

Regular bills

As an alternative to other loans

All of the above

All of the above. People take out payday loans for many different reasons.

All credit cards are a form of predatory lending.

True

False

False. Some credit cards have very high fees and other predatory features, but many of them do not.

How might a payday loan affect your credit report?

If you don't pay the loan back, it could get turned over to a debt collector.

You could get sued if you don't pay the loan back.

Small credit reporting agencies might put your payday loan on a credit report.

All of the above

All of the above. The big three credit reporting agencies don't put payday loans on your report, but there are other ways that the loan activity could show up on your report.