What service does a payday lender provide?

Short term loans that will be repaid at your next paycheck

Loans in exchange for collateral being put up

Financial products like bonds or CD's

The ability to consume a product now and pay for it in the future

Taking responsibility for an event that has happened

The total of all withdraws and deposits in your checking account

The difference between your checking and savings account

What is the difference between a credit report and a credit score?

A credit score is a number that represents your credit history. A credit report is a complete report of all credit history.

A credit score is where you rank against other lenders. A credit report is where you rank within your bank.

A credit score is where you rank within your bank. A credit report is where you rank against other lenders

A credit score is a complete report of all credit history. A credit report is a number that represents your credit history.

What is a drawback to using payday lenders?

Available in communities with large unbanked populations

Credit unions are mostly non-profit. What does this mean?

The incentive is to make their customers happy, not for money

They are trying to make as much money as possible

They compete with other companies to make the most money each year

Their goal is to put other banks out of business

A legal proceeding in which a person who cannot pay their bills gets a fresh financial start

Why do lenders charge interest on a loan?

It is illegal to charge interest

Why would a bank offer a higher interest rate on their savings accounts than other banks?

They are competing with other banks for your business

They are hoping that other banks fail

They are nicer than other banks

They care about the consumer and other banks don't

How do lenders discover answers about someone's character?

They ask the friends and family members of that person

Lenders don't care about a person's character

How is your credit score used?

All the above are ways that a credit score can be used

It is used to determine whether a person is eligible for a loan

It is used to determine what kind of interest rate a person will get on their loan

It can be used by landlords to determine a security deposit amount

Which of the following is true about debt-to-income ratio?

It is a monthly measure of a person's ability to make a payment

It compares your gross monthly income with your debt payments each month

The lower the ratio is, the better

Which of the following is NOT a problem that unbanked people may face?

Unbanked people receive extra security that banked people don't receive

Unbanked people have a hard time securing traditional loans

There is an increased financial cost to being an unbanked person

If something happens to your money, it is not insured and will be gone forever

What is the main advantage of having a good credit score?

It makes it easier to get approved for loans and credit cards with lower interest rates

It allows you to borrow more money

It gives you a higher interest rate on loans

It allows you to get a job in the finance industry

What is the main disadvantage of payday loans?

They require a good credit score

They require a long-term commitment

What is the main advantage of using a credit card?

It allows you to delay payment for purchases

It allows you to spend more than you have

It increases your credit score automatically

It provides insurance on all purchases

What is the main disadvantage of having a bad credit score?

It makes it harder to get approved for loans and credit cards

It increases the interest rate on your savings account

It prevents you from getting a job

It automatically disqualifies you from financial aid for education

Unit 2 PFL Test

Authored by Daniel Jackson

Social Studies

12th Grade

Used 38+ times

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26 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is FAFSA?

Fast Application for Free Student Aid

Federal Application for free Student Assistance

Fundamental Approach to Financial Student Assistance

Free Application for Federal Student Aid

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How are interest rates expressed?

As a negative number

As a fraction

As an equation

As a percentage

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Why does a person complete FAFSA?

The application is required for students who wish to receive financial aid to help pay for college

Only students who complete the application get free money

Everyone who completes the application receives free money

College students that complete the application receive stimulus checks

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a universally accepted criteria on a Rational Decision Model?

Making money

Getting a good education

Making your parents happy

There are no universally accepted criteria

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the most common cause of personal bankruptcy in the United States?

Student loan debt

Home foreclosures

Medical expenses

Unemployment

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

When using a rational Decision Model to make choices, what are alternatives?

All the things that are important to you

All the viable options you can choose from

All the options you don't want to pursue

All the options that your parents picked for you

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

How are credit unions different from banks?

Credit unions charge fees to use

Credit unions will not let you join without a referral

Credit unions offer unique options for loans that banks do not

Credit unions aren't insured

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Unit 2 PFL Test

What is FAFSA?

How are interest rates expressed?

Why does a person complete FAFSA?

Which of the following is a universally accepted criteria on a Rational Decision Model?

What is the most common cause of personal bankruptcy in the United States?

When using a rational Decision Model to make choices, what are alternatives?

How are credit unions different from banks?

What website is authorized by federal law and will give you a free credit report every 12 months?

What service does a payday lender provide?

What has the most weight in determining your credit score?

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