Spring 2024 Credit Classification Flashcard

Front

What is the main difference between installment loans and revolving credit?

Back

Installment loans have a fixed repayment schedule, while revolving credit does not.

Front

Which of the following is an example of secured debt? Credit card debt, Student loans, Personal line of credit, Mortgage loan

Back

Mortgage loan

Front

What type of debt is a car loan?

Back

Installment loan

Front

What is the characteristic of variable rate debt?

Back

The interest rate fluctuates based on market conditions.

Front

Which type of credit typically has a higher interest rate? Options: Secured debt, Installment loans, Variable rate debt, Revolving credit

Back

Revolving credit

Front

What is the main feature of unsecured debt?

Back

It does not require collateral.

Front

What type of credit is a home equity line of credit (HELOC)? Options: Secured debt, Revolving credit, Installment loan, Variable rate debt

Back

Revolving credit

Front

Which type of credit is a personal loan?

Back

Unsecured debt

Front

What is the main difference between variable rate and fixed rate debt?

Back

Variable rate debt has a fluctuating interest rate, while fixed rate debt has a constant rate.

Front

Which type of credit is a credit card?

Back

Revolving credit