Understanding Payday Loans

Jennifer, like many Americans, uses payday loans to manage her financial difficulties. These loans require full repayment at once, often leading to a cycle of debt due to high fees. Jennifer's story highlights the pitfalls of payday loans, which are marketed as short-term solutions but can result in long-term financial strain. The video encourages viewers to learn more about payday loans and their impact.

What are the two basic requirements Jennifer needs to qualify for a payday loan?

• A mortgage and a credit score

• A guarantor and a fixed deposit

• A job and a checking account

• A credit card and a savings account

How much does Jennifer initially pay as a fee for her payday loan?

• $100

• $25

• $55

• $75

What happens when Jennifer cannot repay the payday loan after two weeks?

• She defaults on the loan and faces legal action

• She consolidates the loan with another lender

• She renews the loan by paying another fee

• She pays off the loan with no additional fees

How much does Jennifer end up paying in fees over five months?

• $600

• $375

• $520

• $450

What is the common misconception about payday loans?

• They are a long-term financial solution

• They are only available online

• They are a short-term fix for emergencies

• They have no associated fees