PF: Chapter 4 Lesson 2 Sources and Types of Credit

What is a credit card?

• A loan that requires collateral

• A loan used to buy a house

• A revolving credit account

• A loan for college education

What is the difference between secured and unsecured loans?

• Secured loans require collateral, while unsecured loans do not

• Secured loans have higher interest rates than unsecured loans

• Secured loans are used for vacations, while unsecured loans are used for debt consolidation

• Secured loans have fixed payments, while unsecured loans have variable payments

What is a personal loan typically used for?

• Buying a house

• Paying for college education

• Consolidating debts

• Purchasing a car

What is a mortgage?

• A loan used to buy a house

• A loan for college education

• A loan that requires collateral

• A loan for debt consolidation

What is a home equity loan?

• A loan used to buy a house

• A loan that requires collateral

• A loan for college education

• A loan against the value of a home

What is the primary cause of the student loan crisis?

• Lack of available student loans

• Lack of understanding about student loans

• High interest rates on student loans

• Lack of college education options

What is an auto loan?

• A loan used to buy a house

• A loan for college education

• A loan for debt consolidation

• A loan used to purchase a car

What is the downside of taking an auto loan?

• The car loses value over time

• The loan requires collateral

• The loan has high interest rates

• The loan has fixed payments

What are predatory lenders known for?

• Offering low interest rates

• Providing financial education

• Charging high interest rates and fees

• Offering flexible repayment options

Who should avoid payday loans, title loans, and pawn shops?

• People with bank accounts

• People in need of financial services

• Students in college

• Everyone