1. High Interest Loans Types of Loans that Carry High Interest Rates

2. Loans Loans are contacts involving money. Loans will often require interest on the repayment and will result in the final payment being more than the initial cost. Financial institutions for a loan often use your credit score to determine your individual interest rate. Loans fall into categories:  Low and moderate interest rate  High interest rate  Illegal

3. Low and Moderate Interest Rates These are the type of loans that use credit scores to determine your personal interest rate.  Bank loans  Car loans  Home loans  Personal loans  Credit cards

4. FDIC Federal Deposit Insurance Corporation Insures funds deposited into a bank Credit unions have a different insurance agency

5. High Interest Rate Loans These type loans are often NOT classified as loans from an FDIC certified financial institution. These companies are often classified as:  Pawn Shops  Cash Advance  Rent to Own

6. High Interest Rate Loans Payday Loans, Pawn Shops, or Cash Advance Companies offer high interest rate loans. These companies focus on “short-term loans” and are governed by different requirements from banks, credit unions, and credit card companies.Interest rate for these high interest loans is often predetermined and set at the highest interest rate possible permitted under law of the state. In the state of Alabama, the legal amount for this type loan is 25% PER MONTH!!!

7. High Interest Rate Loans Rent-to-Own  Instead of purchasing an item outright, you will “ rent ” it until you have paid enough towards the principal cost to pay it off. How it works  Requires an initial down payment  Amount determined by the company  Often includes:  Delivery fee  Rental fee  Waiver fee  Additional fees and costs added to monthly bill may include:  Service fees and/or financial fees called waiver fees  Sales tax

8. Illegal Loans Loans that are not sanctioned by the government and are deemed illegal  Loan Sharks Risk Factors of Illegal Loans  Legal action against you resulting in a criminal record and possibly jail time.  Risk of harm for inability to pay back the loan.  These loans could potentially carry a life or death scenario based upon repayment