Debt and Credit

What is "Credit"?

• A reward for having a high credit score

• the ability to borrow money with the understanding that you'll pay later

• All Answers are correct

• Free Money

"Interest" is:

• The cost of borrowing the principal of a loan - usually a percentage

• The grace period of a loan term

• The attention you receive from a bank when you want to borrow money

• The principal you borrow plus the Annual Percentage Yield on a loan

Credit is a way for you to:

• Save now, buy later

• All Answers are wrong

• Buy now, pay later

• Buy now, pay now

Cash equals Credit

• True

• False

The following are types of Consumer Loans

• Mortgages

• Auto Loans

• Credit Cards

• All Answers are correct

Finish this sentence: If we are to understand CREDIT, we must first understand ___________

• Debt

• APR

• Loan Process

• Interest

What are the FOUR types of Debt?

• Secured, Unsecured, Rotating, Non-Rotating

• Secured, Unsecured, Personal, Business

• Secured, Unsecured, Revolving, Non-Revolving

• Home Loans, Lines of Credit, Credit Cards, Auto Loans

"Secured Debt" means:

• Money backed by Credit

• Money backed by Line of Credit

• Money backed by collateral

• Money backed by promise to pay

The following is/are TRUE related to UNSECURED DEBT

• There is NO COLLATERAL

• There is COLLATERAL

• Typically you will pay LOWER INTEREST

• The borrower has pledged something of value to back up the loan

What is "Collateral"?

• The interest rate you pay on a loan

• The assets which are pledged as security for a loan.

• the score you receive for paying a loan on time

• The promise to pay back a loan