Podcast
Questions and Answers
Which describes an example of using unsecured credit?
Which describes an example of using unsecured credit?
- Someone buys new gutters for a home with a credit card. (correct)
- Someone finances a car purchase.
- Someone takes out a mortgage.
- Someone uses their car as collateral.
A credit score between 500 and 600 means a consumer would most likely
A credit score between 500 and 600 means a consumer would most likely
find it hard to get a loan
Filing for bankruptcy can make it hard for a consumer to reestablish and obtain
Filing for bankruptcy can make it hard for a consumer to reestablish and obtain
credit
A similarity between mortgages and auto loans is that both are less risky for lenders.
A similarity between mortgages and auto loans is that both are less risky for lenders.
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?
What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?
The type of credit people are most likely to use during their lifetimes is a
The type of credit people are most likely to use during their lifetimes is a
An example of secured credit is a
An example of secured credit is a
Which best describes a way people can use personal loans?
Which best describes a way people can use personal loans?
What is a benefit of obtaining a personal loan?
What is a benefit of obtaining a personal loan?
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Study Notes
Credit and Loan Concepts
- Unsecured credit example: Purchasing home gutters with a credit card.
- A credit score between 500 and 600 typically results in difficulty securing loans.
- Filing for bankruptcy hampers the ability to rebuild or acquire credit.
Loan Types and Risks
- Mortgages and auto loans present lower risk for lenders, making them more attractive.
- Secured credit is exemplified by mortgages, offering lenders collateral.
Loan Applications and Regulations
- Banks are prohibited from inquiring about an applicant's country of origin during the loan approval process.
Interest Calculations
- Compound interest on a three-year, $100 loan at a 10% annual interest rate totals $33.10.
Personal Finance
- Credit cards are the most commonly utilized form of credit throughout consumers' lives.
- Personal loans can be effectively used to fund college education expenses.
- A significant benefit of personal loans includes access to funds with favorable repayment terms.
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