HOW STUFF WORKS
QUIZZES

FOLLOW US
The Ultimate Payday Loans Quiz
by Staff
You have not been paying much attention to your finances and suddenly an expense that you were not prepared for hits you broadside. You know the bank is not going to be any help this time. Should you visit one of those payday loan places?

What should you keep in mind when considering a payday loan?

  • A payday loan is a great way to get some easy money.
  • Never consider a payday loan except for a real emergency.
  • A payday loan is a good way to cover unusual expenses for a month.

How many payday loan locations are there currently in the United States?

  • about 22,000
  • about 18,000
  • about 12,000

What is the dollar amount of loans granted per year by payday lenders?

  • $15 billion
  • $25 billion
  • $40 billion

What is the typical amount of a loan that you can arrange at a payday loan location?

  • $150 to $500
  • $100 to $500
  • $50 to $500

What do payday loan locations require from you as loan security?

  • They usually register a temporary lien on your car.
  • They do not require any assets to secure the loan.
  • They will put a hold on your credit card equivalent to the amount borrowed.

How do payday lenders normally asses their fees for providing a loan?

  • $15 per $100
  • $15 per loan up to $500
  • $10 per $100 per week of loan

What is the usual method used to repay a payday loan?

  • You will have to return to the location where you borrowed the money on the payment due date.
  • You can go to any of locations owned by the same company and pay your loan on the due date.
  • You leave a check for with the loan location and they cash it on the due date.

What can you do if you realize that you do not have enough money in your account to repay the loan?

  • Hope that they will not find you when your check bounces.
  • Go back before the due date and rollover your loan so they hold the check longer.
  • Go to another payday loan company to get enough to deposit in your account so the check does not bounce.

What is a very attractive feature of payday loan companies besides ease of acquiring a loan?

  • You will be impressed by their friendly and courteous service.
  • You will be impressed by extended hours and convenient locations.
  • You will be impressed with their reasonable fees based on the service that they provide.

What do you have to make sure of before you visit a payday loan outlet?

  • Make sure your credit score is 400 or more.
  • Make sure you have the phone number of your bank branch so they call to check your credit.
  • Make sure to relax as these lenders do not usually bother to check your credit.

What is a typical Annual Percentage Rate (APR) calculation for that $100 loan from a payday loan business?

  • APR equals 391 percent
  • APR equals 352 percent
  • APR equals 326 percent

What happens if you have to rollover a payday loan after paying 391 percent interest?

  • The extra fee just doubled the APR.
  • The APR remains the same but the same money just cost you more.
  • The extra fee you pay boosts the APR to 450 percent.

What is good news surrounding the controversial way payday loan companies charge for loans?

  • Stiff competition has brought fees down at many loan locations.
  • Consumer boycotts of payday loan offices have forced them to reduce fees significantly.
  • Some state governments have passed laws to regulate payday loan company rates and fees.

What is another restriction applying to payday loan companies that you should know about?

  • They are now limited to only one rollover per loan in any three-month period.
  • They are prohibited from charging more than 36 percent APR to military personnel.
  • They are prohibited from granting more than one small loan to the same person in any calendar month.

What is the best alternative available to an individual instead of resorting to a payday loan?

  • Join a credit union and secure a small loan from them.
  • Take a cash advance on your credit card.
  • Make do without the money until you are paid.