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Worksheets8.2 Predatory Lending Assessment
Total questions: 11
Worksheet time: 6mins
Name
Class
Date
1.
Payday lenders, auto title loan centers, and other short-term lending institutions are not regulated.
a)
True
b)
False
2.
Which of these is not typically a strategy used by auto title lenders to increase their revenues?
a)
Charging extremely high interest rates (often over 100%).
b)
Repossessing your car after one late payment to resell for more than its value.
c)
Charging "hidden fees" for things like initial inspection and making the contracts difficult to interpret so you may not notice.
d)
Granting loans for far lower than the actual resale value of your car.
3.
True or False: Rent-to-own total prices are comparable to those you'd find in a store.
a)
True
b)
False
4.
True or False: Because payday loans have such high interest rates, they're typically used by high-income households.
a)
True
b)
False
5.
True or False: Auto title loans are marketed as long-term loans, similar to a mortgage or student loan.
a)
True
b)
False
6.
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.
a)
True
b)
False
7.
True or False: It's possible to get auto title loans, rent-to-own furniture, and other loans without passing a credit check.
a)
True
b)
False
8.
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.
a)
Jake sells his video game system and game collection and pays off the loan.
b)
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.
c)
Jake uses his paycheck to pay the $300, but then immediately takes out another $300 at the same location to pay bills.
d)
Jake sells some clothes, furniture, and old sports equipment to pay off the loan
9.
True or False: Pawn shows hope you do not repay your loan so that they can sell your item.
a)
True
b)
False
10.
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.
a)
True
b)
False
11.
True or False: Pawn shops charge you an interest rate for each month you keep the loan.
a)
True
b)
False
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