WorksheetsCredit and Loans Quiz
Total questions: 34
Worksheet time: 17mins
Which of the following is used by consumers to compare the cost of credit?
Annual Percentage Rate (APR)
Credit Score
Loan Term
Down Payment
What is a fee charged for not making a payment on time called?
Late fee
Initial fee
Down payment
Interest rate
Why do banks sometimes offer credit at low introductory rates?
To attract new customers
To increase late fees
To reduce loan terms
To avoid credit checks
Why do lenders consider loans with a down payment to have less risk?
Borrowers are more likely to repay
Interest rates are higher
Loan terms are shorter
Monthly payments are eliminated
Which of the following may cause a lender to deny credit?
Poor payment history
High down payment
Short loan term
Low interest rate
Who can lenders pay to receive a borrower’s credit score?
Credit bureau
Bank manager
Loan officer
Borrower’s employer
Which fee is charged when a payment is missed?
Late fee
Initial fee
Down payment
Collateral fee
Which type of loan is viewed as having less risk by lenders?
Secured loan
Unsecured loan
Payday loan
Student loan
Why do people make a down payment when taking a loan?
To reduce the total amount financed
To increase the interest rate
To avoid a credit check
To extend the loan term
What might happen if a person cannot repay their loan as agreed?
They may lose future opportunities to borrow
They will receive a bonus
Their credit score will increase
They will get a tax refund
How can bankruptcy help consumers who are unable to repay debt?
It may provide legal relief from some debts
It increases their credit score
It guarantees a new loan
It eliminates all financial responsibilities
Why do people often apply for a mortgage?
To purchase a home
To buy a car
To pay for groceries
To go on vacation
What is a down payment in the context of a mortgage?
The initial amount paid upfront when buying a home
The monthly rent payment
The total cost of the home
The interest charged on the loan
Which of the following is a factor related to mortgage lending?
Fixed vs. variable interest rates
The color of the house
The number of bedrooms
The location of the nearest park
What might happen if a homeowner fails to make mortgage payments?
The home may be repossessed (foreclosed)
The homeowner receives a reward
The mortgage is forgiven
The interest rate decreases
How can insurance requirements affect a mortgage?
They can increase the total cost of home ownership
They guarantee loan approval
They reduce the need for a down payment
They eliminate interest charges
What are two examples of how having a good credit score can benefit a person financially?
Lower interest rates and easier loan approval
Free groceries and free vacations
Higher taxes and more debt
More homework and longer school days
What is the difference between fixed and variable mortgage rates?
Fixed rates stay the same, variable rates can change
Fixed rates are always higher
Variable rates are always lower
Fixed rates are only for cars
What is one reason why consumers should check the accuracy of their credit report?
To ensure there are no errors that could increase the cost of credit
To find new credit card offers
To see their monthly spending habits
To compare interest rates
Which type of student loan accrues interest during periods of deferment or forbearance?
Direct unsubsidized loan
Direct subsidized loan
Parent PLUS loan
Private student loan
What is one benefit of understanding lending laws?
Consumers are protected from abusive marketing practices
Consumers can avoid paying taxes
Consumers can increase their credit score instantly
Consumers can get free gifts from lenders
Which of the following is a type of federal student loan for undergraduate students?
Parent PLUS loan
Home equity loan
Auto loan
Payday loan
Which financial aid option is based on financial need and may require work?
Work-study
Direct unsubsidized loan
Parent PLUS loan
Private student loan
What is a key difference between direct subsidized and direct unsubsidized loans?
Subsidized loans do not accrue interest during deferment; unsubsidized loans do
Unsubsidized loans have lower interest rates
Subsidized loans are only for graduate students
Unsubsidized loans require a co-signer
Which of the following is an example of abusive marketing practice?
Misleading consumers about loan terms
Providing accurate information about loans
Offering competitive interest rates
Sending reminders for payments
What is the importance of completing the FAFSA?
It helps students access scholarships, grants, and loans
It guarantees admission to college
It pays for textbooks directly
It provides free housing
Why should consumers be aware of lending laws?
To protect themselves from unfair credit practices
To avoid paying taxes
To get free credit cards
To increase their loan amount
Which of the following is a step in completing a student loan application?
Understanding the types of loans available
Choosing a major
Buying textbooks
Selecting a dorm room
What is one reason to identify scholarships and grants before applying for student loans?
To reduce the amount of money that needs to be borrowed
To increase the interest rate on loans
To avoid attending college
To pay for travel expenses only
Which of the following is a financial aid option that may require repayment?
Direct unsubsidized loan
Scholarship
Grant
Work-study
