8-3 Personal Finance

What is the 20/10 rule in credit management?

•  Limit the use of credit to no more than 20% of your yearly take home pay, with payments of no more that 10 percent of monthly take-home pay

• Limit the use of credit to no more than 10% of your monthly take home pay

• Limit the use of credit to no more than 10% of your yearly take home pay

• Limit the use of credit to no more than 20% of your monthly take home pay

What is predatory lending?

• Legal and ethical loan practices

• Transparent loan practices

• Low-interest loan practices

• Unfair, deceptive, and fraudulent loan practices

What is a loan shark?

• A person who offers illegal loans at very high interest rates and often uses intimidation to enforce repayment

• A person who offers legal loans at low interest rates

• A bank employee

• A financial advisor

What is equity stripping?

• The ethical practice of extending a loan to a distressed homeowner with affordable payments

• The process of reducing the value of a homeowner's property

• The unethical practice of extending a loan to a distressed homeowner who cannot afford the loan payments, resulting in the lender taking possession of the home

• The process of increasing the value of a distressed homeowner's property

What is a payday loan?

• A cash advance from your next paycheck

• A long-term loan with low interest rates

• A loan for purchasing a house

• A loan for purchasing a car

What is easy access credit?

• Type of credit that has no costs associated with it

• Type of credit that is difficult to obtain with low costs

• Type of credit that can be obtained quickly and easily but that often comes with high or hidden costs

• Type of credit that has no hidden fees

What is an advance fee loan?

• A type of loan that includes a large fee up front

• A type of loan that includes a small fee at the end

• A type of loan that includes a small fee up front

• A type of loan that has no fees

What is unused credit?

• The credit that is not used for a specific purpose

• The credit that is not available to you

• The credit that has been used up

• The remaining credit available to you on current accounts

What is a title loan?

• A short term loan with a high interest rate that uses the title on your vehicle as collateral

• A loan for purchasing a home

• A loan for purchasing a business

• A long term loan with a low interest rate