Classification of Credit and Sources Quiz

Which type of credit is obtained for one's personal use?

What is the main difference between a regular charge account and a revolving charge account?

Which type of personal credit is obtained from doctors, lawyers, dentists, and other professionals?

What is the main purpose of personal loans according to the text?

Which type of personal credit allows you to pay a specific amount of money over a specific period of time?

What does the Truth in Lending Act aim to protect citizens from?

Personal credit criteria can include the length of time a person has lived in an area, which is based on:

What does 'Finance charge' include as per the Truth in Lending Act?

Under the Lending Act, a homeowner's personal creditworthiness might be determined by:

What is the primary focus of the REPUBLIC ACT NO. 3765, also known as the Truth in Lending Act?

Classification of Credit

Classified according to the status of the debtor: ability to pay obligations
Classified according to the time period: duration of credit
Classified according to purpose: reason for obtaining credit

Personal and Consumer Credit

Obtained for personal use
Three types:
- Service Credit: obtained from professionals (e.g. doctors, lawyers)
- Retail Credit: goods obtained on retail, with three categories:
  - Regular charge account: buy and pay later (e.g. credit card)
  - Revolving charge: open credit line with a credit limit (e.g. credit card or line of credit)
  - Installment plan: pay specific amount over a specific period (e.g. mortgage, car loan, tuition fees)

Personal Loans

Granted for purchasing expensive consumer items
Criteria for granting:
- Income/Resources
- Employment and Personal Resources
- Wealth and accumulated Resources
- Person's wealth and income
- Expenses and operating expenses
- Additional sources of income and family size
- Occupation and permanence
- Length of employment and residence

Lending Act (Republic Act No. 3765)

Designed to protect consumers against unfair billing practices
Requires disclosure of finance charges in connection with extensions of credit
Known as the "Truth in Lending Act"
Declaration of Policy: to protect citizens from uninformed use of credit
Definitions:
- "Credit" includes various forms of loans, contracts, and arrangements
- "Finance charge" includes interest, fees, service charges, and other incident charges
- "Creditor" means any person engaged in the business of extending credit

This quiz covers the classification of credit based on the status of the debtor, time period, and purpose of obtaining credit. It also discusses personal and consumer credits and their types such as service credit.