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Worksheets3.1 - Credit Basics
Total questions: 15
Worksheet time: 8mins
The details of any loan will include the following 3 components:
The principal, the interest rate, and the loan term
The money you pay, the money the lender pays, and the principal
The mortgage, the auto loan, and the small business loan
The loan amount, the credit card payment, and the statement
Why are secured loans considered less risky to the lender?
Lenders are allowed to conduct background checks for secured loans
Lenders can take valuable collateral if you fail to repay your loan
Lenders give secured loans all the time, so they're more comfortable doing them
Lenders can check your credit score before giving a secured loan, which they can't do for an unsecured loan
Having a good credit score, making a larger down payment, and finding a cosigner with good credit are all ways to…
Decrease your principal
Decrease your interest rate
Increase your term
Increase your total payments
What makes a loan be categorized as secured?
It is secured after all payments are made
It is secured because it is backed up with some form of collateral
It is secured when the borrower receives the loan amount from thebank
It is secured when someone co-signs on the loan
Which of the following is usually a secured debt?
Student loan
Auto Loan
Credit Card
Personal Loan
Which is NOT a factor that effect interest rate?
Credit Score
Job History
Wealth
Other Debts
A cosigner is not obligated to repay a loan if the other party decides to drop the loan.
TRUE
FALSE
Which are considered to be fixed rate loan? Choose ALL that apply.
Loans
Mortgages
Credit Cards
Overdrafts
Fixed-Rate Loans...
make it easier to budget
are cheaper than other loans
can change yearly
have more fees
Credit is important because...
helps you qualify for better loans
gives you better savings accounts
helps when choosing a bank
it allows banks to reduce overdraft fees
What is credit?
An arrangement to get goods or services and pay for them in the future
A type of loan for buying property
A facility to spend more money from your bank account than you have
A type of borrowing with a fixed amount for a fixed period
What is a mortgage?
A type of loan for buying property
A facility to spend more money from your bank account than you have
An arrangement to get goods or services and pay for them in the future
A type of borrowing with a fixed amount for a fixed period
What is a credit card?
A type of borrowing with a fixed amount for a fixed period
An arrangement to get goods or services and pay for them in the future
A type of loan for buying property
A facility to spend more money from your bank account than you have
What is collateral?
A type of loan
Something valuable that the lender can take if you can't pay back your loan
A type of interest rate
A type of credit score
What is a cosigner?
Someone who can take your collateral if you do not pay
Someone who is responsible for repaying your loan if you can't
Someone who you borrow money from
Someone who helps you get a lower interest rate
