Credit Basics - Check for Understanding

What is another name for peer-to-peer lending?

• Social lending

• Credit scoring

• Title lending

• Financial planning

What do banks do to make money?

• Lend money at a higher rate than the lending amount

• Sell products to customers

• Charge fees for opening accounts

• Offer free services

Which corporations are mentioned as examples of multinational corporations?

• Walmart and Coca-Cola

• Apple and Microsoft

• Amazon and Google

• Pepsi and Nestle

What is required as security for a title loan?

• Collateral

• Credit score

• Cosigner

• Down payment

What does IOU stand for?

• I owe you

• I own you

• Interest on use

• Immediate outstanding unit

Which of the following is NOT true about promissory notes?

• They are informal and hard to enforce

• They contain a written promise of repayment

• They are more enforceable legally

• They include plans for repayment

Which loans are commonly referred to as cash advances or check advance loans?

• Payday loans

• Title loans

• Mortgage loans

• Auto loans

What is a characteristic of revolving credit?

• Involves a maximum amount being loaned to the borrower by the creditor

• Only one payment is made at the end

• No credit limit is set

• Borrower never repays the loan

Which of the following is an example of revolving credit?

• Credit cards

• Car loan

• Mortgage

• Student loan

Which of the following is a reason for using a loan contract?

• To ensure repayment when there is risk of not receiving payment

• To buy groceries

• To make a phone call

• To send a letter