Know Money, Win Money! Episode Two: Payday Loans
Hello, money fans! It’s time for the newest episode of Know Money, Win Money!
We quizzed people about payday loans and gave them money when they got it right. Hopefully they didn’t have to spend that money paying off a payday loan, but if they did, then fingers crossed that was the last bit they needed to pay it off!
You can watch the episode below:
The first question we asked was about the average payment term for a payday loan. That is, how long you have to pay back the full loan amount with all fees and interest included. The answer? Only two weeks. Which means a lot of people are forced to…
Rollover their loan. We asked people what that means, and some of them knew! In case you don’t know, it means that you pay to extend the loan, which can be the start of a vicious cycle of debt. You can learn more about Payday Loan Rollover (an its many, many dangers) here in our blog.
Next we told people that payday loans have an average of 400% APR and asked what APR stands for. It’s Annual Percentage Rate, and it’s a number that describes the full cost of a loan including all interest and fees. That lets you compare different loans in an “apples to apples” fashion to figure out which one makes the most sense for your needs.
Finally, we asked how installment loans are different from payday loans. As the name suggests, installment loans allow you to pay off the loan over time, in installments, so you can manage your finances without falling behind.
All right, now that you know about payday loans, don’t go get one! But do get money when you run into us the next time we’re on the street playing Know Money, Win Money!
Be sure to also check out our previous Know Money, Win Money blog and episode about credit.
What are some financial topics that you’d like us to cover in future episodes of Know Money, Win Money? We want to hear from you! You can email us by clicking here or you can find us on Twitter at @OppLoans.