Car Title Loans Quiz

8. A consumer may cancel a loan at no cost by returning the full principal amount borrowed by the next day.

b. INCORRECT

True. In order to cancel a title loan at no cost, the borrower must return the full principal to the lender by the close of the lender's next business day.

Reference: Quester, A. & Fox, J.A. (2005). Car Title Loans: Driving Borrowers to Financial Ruin, A Report by The Center for Responsible Lending and The Consumer Federation of America. Retrieved on November 10, 2009 from http://www.responsiblelending.org/media-center/press-releases/archives/car-title-loans-trap-borrowers-in-cycle-of-debt.html.