Midterm Review

Consumer credit can help a lender determine how much a borrower is charged to borrow money.

• True

• False

What is a loan?

• The fee that is paid to borrow money.

• A sum of money that is borrowed, which is expected to be paid back with interest.

• The paying off of a debt with a fixed repayment schedule in regular installments over a period.

• The rate lenders charge borrowers for money.

Who determines consumer credit scores?

• Credit bureaus

• Borrower's bank

• The consumer

• Lenders

How does a high credit score impact a borrower's interest rate, monthly payment, and total price paid for the item?

• Lowers them

• Raises them

• Does not impact them

Does the number of credit accounts a consumer holds affect their credit score?

• Yes

• No

Credit allows you to?

• Receive an item right now and never pay for it.

• Purchase an item right now and pay for it later.

• Purchase an item right now and pay for it right now.

• Pay for an item right now, but receive it later.

A closed-ended loan is _________________.

• a personal loan.

• a loan that is for single use.

• a business loan.

• a loan that can be used over and over.

What is interest?

• The rate lenders charge borrowers for money.

• The non-interest portion of a loan.

• The paying off of a debt with a fixed repayment schedule in regular installments over a period of time.

• The fee that is paid to borrow money.

What is the Prime Rate?

• The fee that is paid to borrow money.

• The rate lenders charge borrowers for money.

• The non-interest portion of a loan.

• The number that represents the general level of interest rates in the economy.

What is amortization?

• The fee that is paid to borrow money.

• The rate lenders charge borrowers for money.

• The non-interest portion of a loan.

• The paying off of a debt with a fixed repayment schedule in regular installments over a period of time.