Personal Finance: Categorizing Credit

Which of the following is an example of an installment loan?

• A) Credit card

• B) Mortgage

• C) Personal line of credit

• D) Overdraft protection

What type of credit allows you to borrow up to a certain limit and pay it back over time, with the ability to borrow again?

• A) Installment loan

• B) Revolving credit

• C) Secured debt

• D) Unsecured debt

Which of the following is a characteristic of secured debt?

• It does not require collateral.

• It typically has higher interest rates.

• It is backed by an asset.

• It is always variable rate.

A credit card is an example of which type of credit?

• Installment loan

• Revolving credit

Which of the following is an example of unsecured debt?

• Car loan

• Mortgage

• Personal loan

• Home equity loan

What type of loan typically has a fixed interest rate?

• Credit card

• Personal line of credit

• Mortgage

• Payday loan

Which of the following is a characteristic of unsecured debt?

• It requires collateral.

• It is backed by an asset.

• It typically has lower interest rates.

• It does not require collateral.

A home equity loan is an example of which type of debt?

• Unsecured debt

• Secured debt

• Revolving credit

• Variable rate

Which type of credit is typically associated with a variable interest rate?

• Installment loan

• Revolving credit

• Secured debt

• Fixed rate

What is a key feature of a fixed-rate loan?

• The interest rate can change over time.

• The interest rate remains the same throughout the term.

• It is always unsecured.

• It is always secured.