PREDATORY LENDING

Front

Payday lenders, auto title loan centers, and other short-term lending institutions are not regulated.

Back

False

Front

True or False:  Rent-to-own total prices are comparable to those you'd find in a store. 

Back

False

Front

True or False: Because payday loans have such high interest rates, they're typically used by high-income households. 

Back

False

Front

True or False: Auto title loans are marketed as long-term loans, similar to a mortgage or student loan.

Back

True

Front

True or False:  Many short-term lenders realize their borrowers will never be able to pay off their loans on-time, but they still lend anyway. 

Back

True

Front

True or False:  It's possible to get auto title loans, rent-to-own furniture, and other loans without passing a credit check.  

Back

True

Front

Jake takes out a payday loan of $300. In two weeks, he doesn't have the money to repay it in full. Select which options keeps Jake trapped in the cycle of repayment: Jake sells his video game system and game collection and pays off the loan.
Jake borrows $300 from his father to pay back the loan, and sets up a plan to pay him back $50/mo for 6 months.
Jake uses his paycheck to pay the $300, but then immediately takes out another $300 at the same location to pay bills.
Jake sells some clothes, furniture, and old sports equipment to pay off the loan.

Back

Jake uses his paycheck to pay the $300, but then immediately takes out another $300 at the same location to pay bills.

Front

True or False: Pawn shops offer you a receipt so that you can come back and reclaim your item once you've paid back the loan. 

Back

True

Front

True or False: Pawn shops  charge you an interest rate for each month you keep the loan.  

Back

True 

Front

How do people get trapped in the payday loan cycle?

Back

Customers may visit several payday loan lenders to get $.