Question

You invite your friend Max to dinner and a ballgame. He has a negative credit history, his credit card is maxed out, and he is waiting for his paycheck in three days. He asks if you can stop at a payday lender on the way to dinner to get an advance on his upcoming paycheck.

Which of these is a disadvantage of a payday advance outlet?
Question 5 options:

Getting a payday advance loan helps you build credit.


Cash is available immediately.


A high credit score is required to get a loan.


They have very high interest rates.

Answer 1

They have very high interest rates. Payday loans charge very high fees/APRs, making them an expensive, risky way to borrow.