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Managing Credit, Credit & Student Loans

Total questions: 48

Worksheet time: 48mins

Name
Class
Date
1.
 subsidized loan
a)
A four digit number used as an electronic signature
b)
A need based loan from the federal government, the interest of which is paid for by the U.S. Department of education while the borrower is in school and during grace and deferment periods.
c)
a non based loan from the federal government, the interest of which is paid for by the borrower
d)
ability to stop or reduce loan payments for up to 12 months while interest is accruing
2.
Grace period
a)
A report that summarizes responses made when completing the FAFSA form
b)
Period of time after a borrower graduates, leaves school or drops below halftime enrollment where they are not required to make certain federal loan payments
c)
Company that collects payment on a loan
d)
Total amount it will cost you to go to school ( includes tuition and fees as well as personal expenses)
3.
FAFSA
a)
A federal program that provides part time employment opportunities for students with financial need, allowing them to earn money to help pay educational expenses
b)
The common name for the Free Application for Federal Student Aid form prepared annually to determine eligibility for post secondary financial aid
c)
Postponement of payment on a loan allowed under certain conditions and during which interest does not accrue
d)
A tax exempt financial aid that may be given for many purposes, not necessarily just for education
4.
Forbearance
a)
A federal program that provides part time employment opportunities for students with financial need, allowing them to earn money to help pay educational expenses.
b)
A non‐need‐based loan from the federal government, the interest of which is paid for by the borrower
c)
The difference between the cost of attending a particular school and the expected family contribution.
d)
Ability to stop or reduce loan payments for up to 12 months while interest is accruing
5.
Work Study
a)
A federal program that provides part time employment opportunities for students with financial need, allowing them to earn money to help pay educational expenses.
b)
Total amount it will cost you to go to school (includes tuition and fees as well as personal expenses).
c)
Money awarded to students that does not have to be repaid and is based on academic or other achievement to help pay for education expenses
d)
Postponement of payment on a loan allowed under certain conditions and during which interest does not accrue
6.
Scholarship
a)
A money award to students that does not have to be repaid and is based on academic or other achievement to help pay for education expenses
b)
A four digit number used as an electronic signature
c)
Ability to stop or reduce loan payments for up to 12 months while interest is accruing
d)
Period of time after a borrower graduates, leaves school or drops below halftime enrollment where they are not required to make certain federal loan payments
7.
Expected Family Contribution (EFC)
a)
An estimate of the parents' and/or student's ability to contribute to postsecondary expenses. In general, the lower the EFC, the higher the financial aid award from the college may be
b)
four digit number used as an electronic signature
c)
A non‐need‐based loan from the federal government, the interest of which is paid for by the borrower
d)
A tax‐exempt financial aid that may be given for many purposes, not necessarily just for education
8.
unsubsidized loan
a)
Company that collects payment on a loan
b)
A report that summarizes responses made when completing the FAFSA form
c)
Postponement of payment on a loan allowed under certain conditions and during which interest does not accrue
d)
A non‐need‐based loan from the federal government, the interest of which is paid for by the borrower
9.
Loan Default
a)
Ability to stop or reduce loan payments for up to 12 months while interest is accruing
b)
A federal program that provides part time employment opportunities for students with financial need, allowing them to earn money to help pay educational expenses.
c)
Failure to pay a loan according to the agreed upon terms
d)
(financial) To combine (a number of financial accounts or funds) into a single overall account or set of accounts
10.

How do you calculate Debt to Income Ratio

a)

Debt Divided by Income

b)

Income Divided by Debt

11.

Jonathan just graduated college and can expect monthly loan payments of $405. His new job provides him with an annual salary of $36,000. What is his debt‐to‐income ratio?

a)

11.5%

b)

13.5%

c)

12.1%

d)

98%

12.

The difference between the cost of attending a particular

school and the expected family contribution, minus any other financial aid a student.

a)

Deferment

b)

Financial need

c)

Scholarship

d)

Loan default

e)

Forbearance

13.

Postponement of payment on a loan allowed under certain

conditions when interest does not accrue.

a)

Deferment

b)

Financial need

c)

Scholarship

d)

Loan default

e)

Forbearance

14.

Failure to pay a loan according to the agreed upon terms.

a)

Deferment

b)

Financial need

c)

Scholarship

d)

Loan default

e)

Forbearance

15.

Stop or reduce loan payments for a short period of time while interest still accruing.

a)

Deferment

b)

Financial need

c)

Scholarship

d)

Loan default

e)

Forbearance

16.

Which has the highest interest rate

a)

Private

b)

Plus Loan

c)

Unsubsidized Stafford Loan

d)

Subsidized Stafford Loan

e)

Federal Perkins Loan

17.

Which has the Lowest interest rate

a)

Private

b)

Plus Loan

c)

Unsubsidized Stafford Loan

d)

Subsidized Stafford Loan

e)

Federal Perkins Loan

18.

You should never have to pay for a scholarship.

a)

True

b)

False

19.

During a grace period, interest does not accrue.

a)

True

b)

False

20.

You only have to complete the FAFSA application once for the entire time you are in school.

a)

True

b)

False

21.

All federal student loans have the same interest rates

a)

True

b)

False

22.

If you are a dependent, then you only have to submit information about yourself during the FAFSA process.

a)

True

b)

False

23.

A line of credit established in advance so the borrower does not have to apply for credit each time new credit is desired.

a)

Rent‐to‐own loan

b)

Pawn loan

c)

Open‐end credit

d)

Refund anticipation loan

24.

A loan which the borrower must repay the amount in a specified number of equal payments.

a)

Title loan

b)

Payday loan

c)

Closed‐end credit

d)

Refund anticipation loan

25.
Interest is: 
a)
A charge for lending money to a bank
b)
The amount owed for borrowing money
c)
the amount added into your savings when opening a bank account
d)
a charge for the convenience of accessing money stored in your bank account
26.
Type of loan used specifically for purchasing a home is a __________
a)
Mortgage
b)
Student Loan
c)
Equity Line of Credit
d)
Credit Card
27.
Another name for open ended credit is ____________ credit
a)
Never ending
b)
Revolving
c)
Spinning
d)
Endless
28.
This is when the interest rate will remain the same for the life of the loan
a)
Adjustable rate
b)
Balloon rate
c)
Never changing rate
d)
Fixed rate
29.

Property that businesses use to secure a loan is _____.

a)

capital

b)

conditions

c)

collateral

d)

cash flow

30.

Edward wants to develop a positive credit history. How should he do this?

a)

Maintain reasonable amounts of available credit

b)

Have one type of credit account

c)

Pay cash for the majority of purchases

d)

Open credit accounts in his parents’ names

31.

When Bryce attempted to borrow money at the bank, he learned that his credit score is low. Which best describes what this is likely to mean for Bryce?

a)

The interest rates on his loan will be lower, since his credit score is low.

b)

The purchase price of the item he needs the loan for will be higher due to his low credit score.

c)

The monthly loan payments will be lower due to his lower credit score.

d)

The interest rates on his loan will be higher, since his credit score is low.

32.

Jake’s credit application has been declined because of his negative credit history. Which is most likely to be true?

a)

Jake pays his bills consistently and on time.

b)

Jake has applied for 4 credit cards and a car loan in the past 6 weeks.

c)

Jake has received 3 traffic tickets in the past 2 months.

d)

Jake holds 2 store credit cards, a bank credit card, a car loan, and a mortgage.

33.

Which is not included in an individual’s credit report?

a)

Current and past addresses

b)

Account balances

c)

Bankruptcies and foreclosures

d)

Medical information

34.

Jenny is 18 years old and has applied for credit for the first time. Her credit application was declined because she has no credit history. What should be recommended in order for Jenny to build a positive credit history?

a)

Jenny should acquire several credit cards to establish that she can manage them responsibly.

b)

Jenny should obtain a secured credit card.

c)

Jenny should reapply for the same credit but include a letter of recommendation from someone who knows her well and can vouch for her character.

d)

Jenny should apply for a different type of credit. Since she was applying for a bank loan, she should apply for a credit card.

35.

A record of the borrower’s past loan and credit‐related

transactions.

a)

Lender

b)

Credit History

c)

Credit Report

d)

Closed‐end Credit

36.

How long will a negative credit action usually remain on a credit report?

a)

4 years

b)

11 years

c)

7 years

d)

15 years

37.

A numerical summary of your credit history that indicates your credit worthiness

a)

Credit Score

b)

Credit Report

38.

A Credit Score is a:

a)

A method of tracking money

b)

A measure of someone's credit risk

c)

a number that gives you rewards if you stay under

d)

report of credit history

39.

What are the 3 Credit Reporting Agencies in the U.S.?

a)

Equifax, Expedia and Trans America

b)

Equilibrium, Experience, and Trans Continental

c)

Equifax, Experian, and Trans Union

d)

Equality, Expatriot, and Transformation

40.

FICO stands for:

a)

Freeway Incident Car Overturned

b)

Fair Intrinsic Corporation

c)

Fair Isaac Corporation

d)

Fred Isaac Company

41.

FICO Credit Scores consist of:

a)

credit profile, marital status, total assets, job income

b)

credit history and debt ratio

c)

Amt owed, New Credit, Length of Credit History, Credit Mix, Payment History

d)

all of the above

42.

An "Exceptional" Credit Score is in the range of:

a)

300-579

b)

800-850

c)

580-669

d)

740-799

43.

FICO Scores range from:

a)

0-1000

b)

0-850

c)

300-800

d)

300-850

44.

The most critical factor in a FICO score (35%) is:

a)

Credit Mix

b)

Credit Ratio

c)

New Credit

d)

Payment History

45.

Strategies to improve your Credit Score include:

a)

Paying down your debt

b)

Keeping your cards open after you pay them off

c)

Increasing your Credit Card limit

d)

All of the above

46.

If you want to improve your Credit Utilization Rate, use no more than what amount of your available credit?

a)

50%

b)

30%

c)

20%

d)

40%

47.

Keeping all of your accounts open even if you do not use them is a good credit building strategy

a)

True

b)

False

48.

What does it mean to consolidate your student loans?

a)

To negotiate a lower interest rate for all your loans.

b)

To extend the repayment period of your loans.

c)

To combine multiple loans into a single loan with a fixed interest rate.

d)

To apply for loan forgiveness for your student loans.

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