Questions and Answers
Which describes an example of using unsecured credit?
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
credit
A similarity between mortgages and auto loans is that both are less risky for lenders.
Signup and view all the answers
In determining whether to issue a loan, banks are not allowed to ask about an applicant's
Signup and view all the answers
What is the compound interest on a three-year, $100.00 loan at a 10 percent annual interest rate?
Signup and view all the answers
The type of credit people are most likely to use during their lifetimes is a
Signup and view all the answers
An example of secured credit is a
Signup and view all the answers
Which best describes a way people can use personal loans?
Signup and view all the answers
What is a benefit of obtaining a personal loan?
Signup and view all the answers
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.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Description
Test your knowledge on credit and loans with these flashcards. This quiz covers key concepts such as unsecured credit, credit scores, and the impact of bankruptcy on obtaining credit. Improve your understanding of financial literacy today!
