Understanding Loans

Front

What is a financial asset?

Back

Collateral is a financial asset that can be used to secure a loan.

Front

Why is a good credit score important when applying for a loan?

Back

A good credit score increases the chances of loan approval.

Front

What is a student loan?

Back

A student loan is a loan specifically for college expenses.

Front

What is an open-end loan?

Back

An open-end loan allows for additional purchases beyond the initial loan amount.

Front

How can loans improve a person's standard of living?

Back

Loans can improve living standards by allowing individuals to buy things they cannot afford upfront.

Front

What is collateral?

Back

Collateral is an asset pledged by a borrower to secure a loan.

Front

What is the difference between secured and unsecured loans?

Back

Secured loans are backed by collateral, while unsecured loans are not.

Front

What is the purpose of a credit score?

Back

A credit score assesses a borrower's creditworthiness.

Front

What are interest rates?

Back

Interest rates are the cost of borrowing money, expressed as a percentage.

Front

What is a loan term?

Back

A loan term is the duration over which the loan must be repaid.