Assessment

5. ______ is a financial asset.

• Interest

• Collateral

• Principal

• APR

What type of loan is specifically designed to help individuals consolidate their existing debts into a single, more manageable payment?

• Auto Loan
• Business Loan
• Student Loan
• Debt Consolidation Loan

4. Which is not an example of a Closed-End Loan?

• Mortgages

• Credit Cards

• Car Loans

• Student Loans

A __________ is an amount of money borrowed with the agreement to pay it back with interest over time, often used to buy a home.

7. A type of loan that doesn't require collateral from borrowers but instead lenders rely on credit reports and credit scores.

• Unsecured Loan

• Secured Loans

• Open-Ended Loan

Which is TRUE when you make only the minimum payment each month?

• You are charged interest on the remaining balance

• Your credit line is restored to its maximum amount

• Credit card companies have permission to sell your information

• It is the fastest way to pay off your debt

What is the primary characteristic of a payday loan?

• Long repayment terms

• High-interest rates

• Low fees

• Flexible repayment options

Missed payments can negatively affect your credit score.

• True

• False

The higher your __________ score, the more likely you are to receive lower interest rates on loans.

What is the main purpose of a credit card?

• Paying off debt
• Investing in stocks
• Saving money
• Borrowing money for purchases