WorksheetsIntro to Credit Quiz
Total questions: 10
Worksheet time: 5mins
What is the main advantage of a secured loan?
lower interest rates
require collateral
have higher interest rates
have higher risk
What two items could be used as collateral for a secured loan?
Jewelry and electronics
Stocks and bonds
Car and house
Furniture and appliances
What factors determine the interest rate that will be charged for money borrowed when using credit?
Credit score, loan amount, and economic conditions
Loan term, monthly income, and down payment
Type of loan, location, and borrower's age
Credit score, loan term, and monthly expenses
What is a cosigner and what considerations should they make before co-signing a loan?
A person who guarantees the loan repayment if the borrower defaults; they should consider the borrower's trustworthiness and ability to pay.
A person who borrows money jointly with the main borrower; they should consider the interest rate and loan term.
A person who provides collateral for the loan; they should consider the loan amount and down payment.
A person who reviews the loan documents before signing; they should consider the loan purpose and APR.
What is a danger of taking a variable rate loan?
Monthly payments may fluctuate, making budgeting difficult.
Fixed interest rates are usually higher than variable rates.
Variable rates are always higher than fixed rates.
Variable rate loans have longer terms than fixed rate loans.
Each of the following represents an installment loan EXCEPT...
Home mortgage
Auto loan
Student loan
Credit card
Why might someone consider choosing a loan with the lowest monthly payment?
Low payments fit better in their monthly budget
Low payments indicate a low interest rate
Low payments eventually lead to lower total interest paid
Low payments help you pay off your loan more quickly
What is the principal amount in a loan agreement?
The amount of money borrowed
The fee charged for borrowing money
The duration for which the loan is taken
The total cost of the loan including interest
What does "interest" refer to in the context of a loan?
The amount of money borrowed
The fee charged for borrowing money
The duration for which the loan is taken
The total cost of the loan including principal
What does "term" typically refer to in the context of a loan?
The amount of money borrowed
The fee charged for borrowing money
The duration for which the loan is taken
The total cost of the loan including principal
