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1. Subprime credit is:

Illegal and predatory
More expensive than prime credit
Never recommended

2. The Truth in Lending Act:

Ensures that lenders disclose their terms in the application or contract
Protects borrowers against unfair billing errors
Protects borrowers against illegal collection practices

3. Payday loans are not recommended because:

They are secured by a home
You must repay the loan within 14 days or the lender will take immediate legal action
Their interest rates are among the highest of all loan products

4. Car title loans:

Are secured loan products
Typically have 25 percent APRs
Are only available to borrowers who have a good credit history

5. Check-cashing businesses:

Offer free financial services to the community
Usually charge about two percent of the amount of a check to provide you with the money
Are excellent alternatives to traditional financial institutions

6. A rent-to-own arrangement:

Provides an interest-free period of time before payments are due
Makes sense when you want a luxury item that you can't afford
Is an expensive way to purchase items

7. To recover from using high-cost credit products and services:

Prioritize the creditors that charge the highest interest rates and fees
Drop insurance coverage so you can pay more to your creditors
Completely avoid using credit now and in the future

8. A wise alternative to using a subprime loan in times of need is:

Cash out your retirement savings
Sell property that you don't need or use
Use all the equity in your home

9. Traditional financial institutions:

Will always lend you money when you need it
Are only available to those with jobs
Typically provide their members with the most cost-effective services, loans, and lines of credit

10. Rather than turning to expensive financing to purchase an item, it is usually better to:

Use a store's layaway program
Ask your employer for an advance on your paycheck
Cash out a life insurance policy

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