Predatory Lending Flashcard

Front

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

Back

False

Front

You can go to another state to get a car title loan

Back

True

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

Back

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

Front

Which statement best describes why payday loans, auto title loans, and pawnshop transactions are sometimes referred to as "predatory lending"?

Back

Lenders "prey" on low-income borrowers or bad credit borrowers who have little or no other options for obtaining a loan.

Front

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

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

How do people get trapped in the payday loan cycle?

Back

Customers may visit several payday loan lenders to get $.