MCP Financial Literacy Borrowing (2)

APR stands for

• annual profit rate

• annual percentage rate

• annual participation rate

• annuity profit range

What is a Grace Period?

• A period where you don't have to pay interest

• A period where if you pay, then you don't have to pay interest

• A period where the Bank will give you extra time to pay off what you owe

• A period where interest is accumulating but you don't have to pay it

In order to qualify for Federal student loans…

• You must have financial need
• You must file the FAFSA
• You must complete a separate application for federal loans
• You must take out a private loan

Both an auto loan and a mortgage are examples of a secured debt.

• True

• False

If my credit score is low at a 600, should my interest be high or low

• High Interest
• Low Interest

The amount of money that the lender lends to the borrower is called the....

• principal

• down payment

• default

• collateral

The longer the loan term the less total interest you pay.

• False

• True

What would happen to a monthly payment if the interest rate increased?

• The payment would go up.
• The payment would go down.
• The payment would remain the same.
• None of the above.

Which of the following loans at 5% APR would have the LOWEST monthly payment?

• 3 year loan

• 4 year loan

• 5 year loan

• 7 year loan

Which of the following loans at 5% APR would result in the LOWEST total cost of a car loan?

• 3 year loan

• 5 year loan

• 4 year loan

• 6 year loan