Payday Loans.What are payday loans? Why should you avoid payday loans as a source of funds?

Payday loans are:(Select the best answer below.)

A.

very short-term loans obtained by writing a post-dated check. The lender will advance credit that is less than the amount of the check and then deposit the check when you indicate the funds are in your account.

B.

very short-term loans obtained by writing a post-dated check. The lender will advance cash that is less than the amount of the check and then deposit the check when you indicate the funds are in your account.

C.

very long-term loans obtained by writing a post-dated check. The lender will advance cash that is less than the amount of the check and then deposit the check when you indicate the funds are in your account.

D.

very short-term loans obtained by writing a post-dated check. The lender will advance cash that is more than the amount of the check and then deposit the check when you indicate the funds are in your account.

Why should you avoid payday loans as a source of funds?(Select the best answer below.)

A.

The monthly interest rates for payday loans are commonly several hundred percent a month making them an extremely costly source of financing.

B.

The annualized interest rates for payday loans are commonly several hundred percent a year making them an extremely inexpensive source of financing.

C.

The annualized interest rates for payday loans are commonly several hundred percent a year making them an extremely costly source of financing.

D.

The annualized interest rates for payday loans are commonly five to ten percent a year making them an extremely costly source of financing.