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WorksheetsUnderstanding Credit and Borrowing Costs
Total questions: 20
Worksheet time: 12mins
Which of the following is a factor that can affect the approval process for a credit application?
The applicant's favorite color
The applicant's credit score
The applicant's height
The applicant's shoe size
What is typically required in a credit application process?
A list of favorite movies
Proof of income
A personal essay
A letter of recommendation
Which aspect is commonly discussed during the negotiation of a car purchase?
The car's interior design and extras you might want
Interest rate on loan/purchase price
The car's top speed
The car's warranty period
What is a major consideration when deciding between buying and leasing a vehicle?
The available engine types
The length of the warranty
The monthly payment amount
The brand of the car
Which type of credit is best suited for purchasing a car?
Payday loan
Auto loan
Store credit card
Title loan
How can taking on debt early in life affect financial stability later?
It guarantees wealth
It can limit future borrowing capacity
It has no effect
It ensures a high credit score
What is a common feature of payday loans?
Extended repayment terms
High interest rates
Improved credit score
Collateral required
What is a common requirement for obtaining a student loan?
Owning a car
Enrollment in an educational institution
A high-paying job
A personal reference
What type of business provides short-term loans in exchange for personal items as collateral?
(a)
What is a common feature of a consumer installment loan?
Variable interest rates
Fixed monthly payments
No repayment schedule
Unlimited borrowing amount
Which factor is most likely to influence the interest rate on a credit application?
The applicant's age
The applicant's credit history
The applicant's favorite sport
The applicant's shoe size
What is collateral?
What is the role of a cosigner in a loan agreement?
A cosigner is responsible for the loan if the primary borrower fails to pay, and their credit score can be affected.
A cosigner is entitled to a share of the loan proceeds.
A cosigner has no financial obligations related to the loan.
A cosigner's role is limited to providing moral support to the borrower.
What is a lease?
What's the difference in an unsecured loan and a secured loan?
Which one of these is NOT a feature of a credit card?
Which are some examples of risky credit arrangements?
Student loans and Graduate school loans
Auto loans and motor cycle loans
Home equity loans and Lines of Credit
Gift cards
Credit cards provide people with revolving open-ended credit, which can be drawn from repeatedly up to some preset limit.
True
False
A time allowed by credit card companies in which you are NOT charged interest on purchases is called
Credit card feature that allows one to exceed their credit limit is called (a) protection
