Credit

A person choosing a mortgage usually selects a fixed-rate loan because she knows that

• the interest rate remains the same for the life of the mortgage.

• her income will increase within the next three years.

• the interest rates are going down.

• her homeowners insurance premiums will be lower.

Which of the following is an example of long-term debt?

• A student loan.

• A debit card purchase.

• A term life insurance policy.

• A stock portfolio.

What type of information is not found on a consumer's credit report?

• Personal medical information.

• Criminal records.

• Employment history.

• Current and past addresses.

Choose the best suggestion for building and maintaining a good credit score.

• Have money in savings and protect against identity theft.

• Keep debt low and pay bills on time.

• Make safe investments and set clear financial goals.

• Comparison shop and follow a budget.

What is true about loans?

• The lower the APR, the more interest is paid.

• The larger the down payment, the lower the principle.

• The shorter the length of the loan, the smaller the payments.

• The higher the APR, the less interest is paid

An arrangement to receive cash, goods, or services now and pay for them in the future is called

• credit.

• liquidity.

• collateral.

• net income.

The possibility that a borrower fails to repay a loan on time and will never be able to repay the loan is known as

• interest rate risk.

• credit risk.

• liquidity risk.

• investment risk.

When applying for a loan, borrowers will probably need to provide information regarding their

• work experience.

• assets.

• health record.

• financial plan.

A loan can be denied by a lender because of a person's

• education.

• health.

• credit history.

• gender.

What type of financial aid needs to be repaid?

• Loan.

• Grant.

• Scholarship.

• Work-study.