Consumer Loans and the Loan Process

Term

Principal (correct)

Payment

Interest

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

Secured loans do not require collateral, while unsecured loans require collateral.

Secured loans require collateral, while unsecured loans do not require collateral.

Secured loans have lower interest rates, while unsecured loans have higher interest rates. (correct)

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

A fixed rate is higher than a variable rate, while a variable rate is lower than a fixed rate.

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

A fixed rate is lower than a variable rate, while a variable rate is higher than a fixed rate.

<p>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>Not over 20% of net monthly income</p> Signup and view all the answers