PRE TEST: Borrowing Money

What is a secured loan?

• a loan that is issued based on the borrower's creditworthiness

• a loan that requires collateral

• a loan that is issued without any collateral

Which of these statements describes a lien?

• the right of a lender to sell collateral to get back the principal if the borrower cannot repay the loan

• the right of a lender to refuse a loan if the borrower hasn't repaid previous loans on time

• the right of a lender to increase interest rates depending on economic factors

Which do lenders take into account before issuing unsecured debt?

• interest

• collateral

• creditworthiness

Grace got a loan of $500 from her bank, and she had to repay it with $550. Which term describes the extra money Grace had to pay?

• principal

• interest

• annual percentage rate

Adam borrowed money to buy a new car. The bank now has a lien. What can happen if Adam doesn't make his payments on time?

• The bank could sell the car.

• The bank could lend him more money.

• The bank could exchange his new car for an old one.

What do you call an arrangement of receiving money, goods, or services now in exchange for the promise of payment later?

• collateral

• interest

• credit

Tags

CCSS.HSS.MD.B.5

Which of these people repaid his loan at a variable interest rate?

• Andre, who made monthly payments of $57 for one year

• Gary, who paid $37 each month for the first six months and $67 for the next six months

• Dean, who repaid the full amount of the loan in one installment

What is the security for the repayment of a secured loan called?

• percentage

• collateral

• interest

If Damian needs to borrow money to pay for something, he needs to request which of the following?

• collateral

• a loan

• interest

• a lien

Pete wants a loan of $1,500. Which of these terms describes the money he wants to borrow?

• principal

• collateral

• interest