WorksheetsWho gets the better interest rate?
Total questions: 16
Worksheet time: 18mins
If you are a borrower, which statement is true?
You will pay additional money on your loan called interest.
A lower interest rate is worse for you.
Your interest rate is determined on your negotiating skills.
Having a lower credit score gets you a lower interest rate.
What is the amount of money you borrowed called?
The greater your interest rate is, the (a) you'll pay in interest.
If you are a higher risk for repaying your loan, will you have a higher or lower interest rate?
Imagine you are the head of a bank and you have two friends, Bob and Alice, applying for loans. Who would you offer a better interest rate to?
Bob, who has a credit score of 650.
Alice, who boasts a credit score of 720.
They both get the same rate, regardless of their credit scores.
Aria has been working at the same tech company for ten years, while Liam changes his tech jobs every six months. Their financial situations are otherwise the same. If you were a bank manager, who would you approve a home loan for?
Aria
Liam
Neither
Emma
Person A wants to borrow for 5 years, and person B wants to borrow for 8 years, who gets the lower interest rate?
Person A and B are both applying for a loan of $10,000. Person A offers up their $5,000 car as collateral. Person B offers $3,500 in their savings account as collateral. Who gets the lower interest rate?
Person A has a credit score of 700 and Person B has a credit score of 600. Who is likely to get a lower interest rate on a loan?
Person A
Person B
Both get the same interest rate
The interest rate is not determined by credit score
What is the term for the cost of borrowing money, expressed as a yearly percentage of the loan amount?
Principal
Interest
Annual Percentage Rate (APR)
Dividend
Person A wants to borrow for 3 years, and person B wants to borrow for 10 years, who gets the lower interest rate?
Person B
They both get the same interest rate
Person A
What is the term for the amount of money you pay back over and above the principal amount in a loan?
Dividend
Profit
Interest
Principal
A loan that doesn't have collateral is called an (a) loan
Why might borrowers be taken advantage of?
An asset that is used to back up a loan is called (a) .
What are some advantages and disadvantages of credit and loans?
You can acquire assets
Useful in an emergency
You can have things sooner than later
Builds a credit score
You have to repay debt
You are charged interest
You could be taken advantage of if you don't know the conditions of the loan
