WorksheetsUnderstanding Sources of Credit
Total questions: 15
Worksheet time: 8mins
What percentage of Americans have a credit card, according to the Ramsey Solutions study?
50%
80%
70%
90%
What is the main feature of a revolving credit account?
It has a fixed payment schedule.
It is only used for large purchases.
It allows multiple purchases as long as the credit limit is not exceeded.
It requires collateral.
What is collateral in the context of secured loans?
A loan repayment plan.
A type of interest rate.
An asset the borrower owns, like a car or house.
A borrower's credit score.
What happens if a borrower fails to make payments on a secured loan?
The lender can take and sell the collateral.
The borrower’s credit score improves.
The loan is automatically forgiven.
The borrower receives a penalty fee.
What is the main difference between secured and unsecured loans?
Unsecured loans require a down payment.
Secured loans require collateral, while unsecured loans do not.
Unsecured loans have lower interest rates.
Secured loans are only for businesses.
What is a common use for personal loans?
Purchasing a car.
Paying for a vacation or consolidating debt.
Paying for groceries.
Buying a house.
What is a financial lien in the context of a home mortgage?
A fixed interest rate.
A type of insurance.
A legal claim against a property.
A penalty for late payments.
What is the typical duration of a home mortgage?
5–10 years.
50 years.
15–30 years.
1–5 years.
What is equity in the context of home ownership?
The total cost of the house.
The monthly mortgage payment.
The difference between the amount owed and the current market value of the home.
The interest rate on the mortgage.
What is a HELOC similar to?
A car loan.
A credit card.
A payday loan.
A student loan.
What is a major risk of borrowing against home equity?
The loan term is too short.
The bank could take your home if you default.
The house value will always decrease.
The interest rate may decrease.
What is the average monthly payment for a new car loan?
$300
$200
$550
$1,000
What is a car considered in terms of value?
An appreciating asset.
A depreciating asset.
A liquid asset.
A fixed asset.
What is the main issue with predatory lenders?
They only lend to wealthy individuals.
They charge outrageously high interest rates and fees.
They offer low-interest loans.
They require extensive paperwork.
What is the primary reason for the student loan financial crisis?
The government forgives too many loans.
Colleges charge too little for tuition.
Student loans are only available to certain people.
Students don’t understand what they’re signing up for.
