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Understanding Predatory Lending Practices

Understanding Predatory Lending Practices

Assessment

Interactive Video

Business, Social Studies, Life Skills

9th - 12th Grade

Practice Problem

Hard

Created by

Patricia Brown

FREE Resource

The video tutorial discusses predatory lending, a practice that strips wealth from low-income consumers through inflated fees and interest rates. It covers predatory mortgage lending, subprime loans, and payday lending, highlighting their negative impacts on borrowers. The video also identifies common abusive practices and offers alternatives to payday lending, emphasizing the importance of understanding financial terms to avoid falling prey to such schemes.

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10 questions

Show all answers

1.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a key characteristic of predatory lending?

Charging inflated fees and interest rates

Providing clear loan terms

Offering loans only to high-income individuals

Charging fair interest rates

2.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How does predatory mortgage lending affect families?

It often leads to foreclosure

It increases their wealth

It provides better loan terms

It reduces their monthly payments

3.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a common practice of predatory mortgage lenders?

Providing free financial advice

Offering loans with no fees

Reducing interest rates over time

Charging excessive fees

4.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is loan flipping?

Reducing the loan amount over time

Providing a loan with a fixed interest rate

Offering a loan with no interest

Refinancing a loan to generate fee income without benefit

5.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a characteristic of payday lending?

Long-term financial assistance

Loans only for business purposes

Low interest rates

Short-term loans with high fees

6.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the typical annual percentage rate for payday loans?

400%

100%

20%

5%

7.

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a common outcome for borrowers who renew payday loans?

They pay less in fees

They end up paying more in fees than borrowed

They receive a lower interest rate

They get out of debt quickly

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