Spring 2024 Credit Classification Quiz

What is the main difference between installment loans and revolving credit?

• Installment loans have a lower credit limit than revolving credit

• Installment loans are unsecured, while revolving credit is secured

• Installment loans have a variable interest rate, while revolving credit has a fixed rate

• Installment loans have a fixed repayment schedule, while revolving credit does not

Which of the following is an example of secured debt?

• Credit card debt

• Student loans

• Personal line of credit

• Mortgage loan

What type of debt is a car loan?

• Installment loan

• Fixed rate debt

• Revolving credit

• Unsecured debt

What is the characteristic of variable rate debt?

• The loan has a predetermined repayment schedule

• The loan is backed by collateral

• The interest rate fluctuates based on market conditions

• The interest rate remains the same throughout the loan term

Which type of credit typically has a higher interest rate?

• Secured debt

• Installment loans

• Variable rate debt

• Revolving credit

What is the main feature of unsecured debt?

• It is backed by collateral

• It has a fixed repayment schedule

• It has a lower credit limit

• It does not require collateral

What type of credit is a home equity line of credit (HELOC)?

• Secured debt

• Revolving credit

• Installment loan

• Variable rate debt

Which type of credit is a personal loan?

• Secured debt

• Revolving credit

• Unsecured debt

• Fixed rate debt

What is the main difference between variable rate and fixed rate debt?

• Fixed rate debt has a higher credit limit than variable rate debt

• Variable rate debt has a longer repayment term than fixed rate debt

• Variable rate debt has a fluctuating interest rate, while fixed rate debt has a constant rate

• Fixed rate debt is unsecured, while variable rate debt is secured

Which type of credit is a credit card?

• Variable rate debt

• Revolving credit

• Secured debt

• Installment loan