BANKING GENERAL KNOWLEDGE
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Everyone in the company can go online to see the names of the people who have had to take payday loans.
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The person who takes a payday loan will not be eligible to for a raise next year.
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Payday loans carry very high fees equivalent to more than a 100% annual interest rate (APR)
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The person’s employer will probably give the employee who takes a payday loan a poor job evaluation.
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Detailed explanation-1: -The very reason that makes the payday loans attractive can suck the borrower in a vicious cycle of debt. Very High-Interest Rates: While the interest rate per day may seem manageable, when annualised, they turn out to be 400% annual interest (APR) or even more. The APR can even go up to 9000%, for very short loans.
Detailed explanation-2: -Reasons to Avoid Payday Loans Payday Loans Are Very Expensive – High interest credit cards might charge borrowers an APR of 28 to 36%, but the average payday loan’s APR is commonly 398%. Payday Loans Are Financial Quicksand – Many borrowers are unable to repay the loan in the typical two-week repayment period.
Detailed explanation-3: -Why are payday loans bad? The obvious danger of payday loans is that they can be incredibly expensive to pay off. Borrowers may end up paying more back than they would on other types of loans. Another risk of short-term borrowing is the way it may impact your finances from one month to the next.
Detailed explanation-4: -Many payday lenders do not rely on a credit check at all. They understand that most borrowers looking for payday loans typically do not have the best credit. Instead, lenders make up for the increased credit risk by charging higher interest rates and more fees.
Detailed explanation-5: -Cost of a payday loan A typical two-week payday loan with a $15 per $100 fee equates to an annual percentage rate (APR) of almost 400 percent. By comparison, APRs on credit cards can range from about 12 percent to about 30 percent.