Credit and Debt Vocab

What is a fixed rate in terms of a loan?

• The interest rate changes frequently

• The interest rate stays the same for the life of the loan

• The interest rate decreases over time

• The interest rate increases over time

What should you do if you cannot pay your credit card bill?

• Ignore the bill

• Call the lender and negotiate a new payment schedule

• Pay only the minimum amount

• Take out another loan

What type of loans should you avoid?

• Student loans

• Payday loans and Pawn Shops

• Mortgage loans

• Auto loans

How long does bankruptcy stay on your credit report?

• 5 Years

• 7 Years

• 10 Years

• 15 Years

What decreases on a loan every month?

• The Interest

• The Principal

• The Term

• The Collateral

What is a credit score?

• A measure of monthly income

• A numerical expression based on a level analysis of a person's credit files

• A type of loan

• A bank account balance

What doesn’t go away even after you file for bankruptcy?

• Credit card debt

• Taxes, student loans, and child support

• Mortgage loans

• Auto loans

What happens if you do not pay a loan bill?

• The loan is forgiven

• Bank or Lender repossesses the collateral

• The interest rate decreases

• The loan term is extended

What is a secured loan?

• A loan with no collateral

• A loan backed by collateral to reduce the risk associated with lending

• A loan with a fixed interest rate

• A loan with a variable interest rate

What is Chapter 7 bankruptcy also known as?

• Reorganization bankruptcy

• Liquidation or straight bankruptcy

• Wage earner plan

• Debt adjustment plan