Consumer Loans and the Loan Process

Credit score

Principal (correct)

Interest rate

Loan application

Secured loans require collateral, while unsecured loans do not require collateral. (correct)

Secured loans have shorter terms, while unsecured loans have longer terms.

Secured loans are reported to credit bureaus, while unsecured loans are not reported.

Secured loans have higher interest rates, while unsecured loans have lower interest rates.

A fixed rate loan has a lower interest rate than a variable rate loan.

A fixed rate loan does not change during the length of the loan, while a variable rate loan can change. (correct)

A fixed rate loan can change during the length of the loan, while a variable rate loan does not change.

A fixed rate loan has a longer term than a variable rate loan.

<p>APR is the interest rate plus the fees associated with the loan</p> Signup and view all the answers

<p>The number of compounding periods in a year</p> Signup and view all the answers

<p>Interest portion decreases, principal portion increases</p> Signup and view all the answers

<p>A very short-term loan with extremely high interest</p> Signup and view all the answers