10 Questions
What is the main purpose of consumer loans?
To permit buying expensive items
What is a disadvantage of consumer loans?
You must provide collateral or security for the loan
What is a personal loan usually obtained for?
To finance a large purchase
What is included in a loan contract?
Amount of the loan and interest rate
What is a benefit of consumer loans?
You can spread payments over a long period of time
What happens when the maturity of a loan is longer?
Lower payments are made, but more interest is paid over the life of the loan
What is the purpose of collateral in a secured loan?
To ensure the lender can repossess the asset if the borrower defaults
What aspect of a borrower does the 'Character' component of the 5 Cs of Consumer Borrowing refer to?
The borrower's integrity and previous obligations
What type of loan is not backed by collateral?
Unsecured loan
What is the purpose of cosigning a loan?
To strengthen the loan application if the borrower's credit history is weak
Learn about consumer borrowing, its advantages, and how it enables the purchase of expensive items. Understand the concept of consumer loans and their repayment schedules.
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