Credit & Borrowing Test Review PDF
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This document is a study review on credit and borrowing, covering topics such as debt, credit definitions, loan types, and mortgage considerations. It outlines multiple choice and short answer questions, with further details to be considered.
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Credit & Borrowing Test Review Test format: Multiple Choice & Short answer Study/Review: 1. Credit: Borrowing Money a. What is debt? b. What is credit? c. Insufficient funds/Overdraft (what is it? How to stay away from it?) d. Principal, interest, term defin...
Credit & Borrowing Test Review Test format: Multiple Choice & Short answer Study/Review: 1. Credit: Borrowing Money a. What is debt? b. What is credit? c. Insufficient funds/Overdraft (what is it? How to stay away from it?) d. Principal, interest, term definitions e. 5 C’s of credit: what they are and what they mean f. What is a credit score and how is it calculated? g. Advantages/Disadvantages of using Credit h. Secured/Unsecured loans - points about what they are and examples for each regarding collateral and interest rates i. Cosigner - what is it, what is important to think through before cosigning? Consequences of a missing payment? j. Buy now pay later (BNPL): what it is, how it works, why people use it k. Debt repayment: Snowball, Avalanche, Consolidation methods 2. Buying VS Renting/Leasing a. % of monthly income usually granted for a mortgage (30% of your income) b. When can renters be sure they are not ‘wasting’ their money? c. Advantages/Disadvantages to owning a home d. Mortgages: Amortization, Fixed vs Variable rate e. How can people pay down their mortgage/debt faster? Pay less interest and less years in debt?
