What I Know (Business and Consumer Loans)

What do you call the money borrowed that may be used for a business purpose?

• business loan

• collateral

• consumer loan

• mortgage

What do you call an asset used to secure the loan that may be real estate or other investments?

• business loan

• collateral

• consumer loan

• mortgage

What is the term coined as the time it takes to pay the entire loan?

• collateral

• credit report

• due date

• term of the loan

Which of the following is money lent to an individual for personal or family purposes?

• business loan

• collateral

• consumer loan

• mortgage

What do you call a person who guarantees to pay for someone else’s financial obligation if the borrowers fail to do so?

• amortization

• collateral

• guarantor

• mortgage

Which of the following is not an example of a business loan?

• cash flow loans

• credit cards

• invoice financing

• micro loans

Which of the following is not an example of a consumer loan?

• asset-based financing

• car loans

• mortgages

• student loans

Which of the following statements about the interest rate of consumer and business loans are correct?

• The business loan has higher interest than a consumer loan.

• Consumer loan has a higher interest rate than a business loan.

• Consumer loan and business loan are always equal in interest rates.

• The business loan has no interest rate, unlike consumer loan.

Which of the following statements about terms of payment for consumer and business loans is correct?

• The business loan has a longer term of payment than a consumer loan.

• Consumer loan has a longer term of payment than a business loan.

• Consumer and business loans are always equal in terms of payment.

• Consumer loan has no specific term of payment, unlike a business loan.

Which of the following is not a required document if you are applying for a business loan.

• certificate of employment

• company’s financial statement

• income tax return

• credit report