CREDIT 2 Costs /Methods of getting Credit

A loan is money that ...

• you keep with no repayment

• you borrow and must repay

• is given to you just because you asked nicely

Before you take out a loan you need to be sure that you can afford it .

• True

• False

One way to budget for a loan is to add up all your monthly expenses and then

• Mulitlpy it by two. If what is left covers your loan, go for it

• Divide it by two. If what is left covers it, go for it

• Subtract it from your take home pay. If what is left covers your loan, go for it

Is cutting back on unnecessary but fun activities one way to allow for a loan...

• Yes

• No

The debt payments-to-income ratio is the % of debt you have

• in relation to your gross income

• in relation to others' income

• in reltion to your net income

Net income is your

• take home pay after deductions

• pay before deductions

• money you put in a net

According to our book and notes, experts say that it's ok to put _____% of your net income towards debt payments

• 10

• 20

• 25

• 30

If you are thinking of taking out a loan or applying for a credit card ; the first thing you should consider is

• if you can afford it !

• if you can afford it !

• if you can afford it !

APR stands for

• annual percentage ration

• annual perpetuity rate

• annual percentage rate

APR is the cost of credit on a ____expressed as a percentage .

• daily basis

• weekly basis

• monthly basis

• yearly basis