Loan Fundamentals Vocab Check

Front

Why do people get loans?

Back

Some purchases are too big/expensive to pay for upfront.

Front

Mike takes a loan for $12,500 at 6.8% interest for 5 years. The amount $12,500 is called the ___ of the loan.

Back

principal

Front

Mike's loan: $12,500 at 6.8% interest for his business.

Back

5 years

Front

Situation NOT suitable for cosigning: Caitlin's friend has a business idea but no plan or investors, asks Caitlin to cosign for a loan.

Back

Caitlin's friend lacks a business plan and asks for a cosigner for a small business loan.

Front

To secure a business loan, Dale uses his house as ___, causing tension with his wife.

Back

collateral

Front

Lowering loan interest rates can be aided by various factors, EXCEPT:

Back

Already having several other loans unpaid.

Front

Megan's mortgage interest rate rose from 2.1% to 7.2% after the Federal Reserve increased rates. What type of loan did she get?

Back

Variable rate loan

Front

Lucy gets a $1,000 cash advance with 45% interest, leaving her with $550 from her paycheck. What type of loan is this?

Back

Payday Loan