Consumer Loans and the Loan Process
7 Questions
1 Views

Choose a study mode

Play Quiz
Study Flashcards
Spaced Repetition
Chat to lesson

Podcast

Play an AI-generated podcast conversation about this lesson

Questions and Answers

Which one of the following is a feature of a loan?

  • Term
  • Principal (correct)
  • Payment
  • Interest

    • What is the difference between a secured loan and an unsecured loan?

  • 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)

    • What is the difference between a fixed rate and a variable rate?

  • 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.

    • Which one of these best describes the annual percentage rate (APR)?

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

    What does compound frequency refer to?

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

    What happens to the interest and principal portions of a monthly payment in an amortized loan?

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

    What is the loan/debt ratio guideline for monthly loan payments (not including mortgage)?

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

    More Like This

    Use Quizgecko on...
    Browser
    Open
    Browser
    Browser