Borrowing Basics

14 Questions | Total Attempts: 536

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Loan Quizzes & Trivia

Just a pre test for borrowing information. I would like to see what we as a class know and do not know. Please try your best!


Questions and Answers
  • 1. 
    What is credit?
    • A. 

      Money you borrow and must pay back

    • B. 

      Free money that you do not have to pay back

    • C. 

      Money you have saved for emergencies

    • D. 

      The balance left on a gift card after you have used it to pay for something

  • 2. 
    Select all that apply. Maintaining good credit is important beacuse it:
    • A. 

      Can help you graduate from college

    • B. 

      Allows you to carry more cash than usual

    • C. 

      Allows you to purchase large items like a car, house, or furniture and pay over time

    • D. 

      Might cause your interest rates to be raised

  • 3. 
    What is a loan?
    • A. 

      A charge by a financial institution for maintaining or servicing your loan account

    • B. 

      Money you borrow but must also repay

    • C. 

      Something valuable that you own and can sell for cash

    • D. 

      The cost of borrowing money

  • 4. 
    Which type of loan is used to pay for personal expenses for you and your family? Select all that apply.
    • A. 

      Consumer installment loans

    • B. 

      Credit Cards

    • C. 

      Home loans

  • 5. 
    A loan for which of the following is most likely to be unsecured? Select all that apply.
    • A. 

      Home

    • B. 

      Car

    • C. 

      Furniture

    • D. 

      Education (e.g. Student Loan)

  • 6. 
    Which of the following replaces a loan on your home in order to get a better interest rate?
    • A. 

      Home equity loan

    • B. 

      Home equity line of credit

    • C. 

      Home refinance loan

    • D. 

      Home purchase loan

  • 7. 
    What type of an interest rate stays the same?
    • A. 

      Fixed rate

    • B. 

      Variable rate

    • C. 

      Waning interest

    • D. 

      Dual rate

  • 8. 
    What should you review and compare when shopping for a loan?
    • A. 

      Annual percentage rate (APR)

    • B. 

      Fees

    • C. 

      Truth in Lending Disclosures

    • D. 

      All are true

  • 9. 
    What four factors do lenders generally use in their loan-making decision?
    • A. 

      Collateral, capacity, capital, and whether you purchase their credit protection insurance

    • B. 

      Capital, character, overdraft protection, and collateral

    • C. 

      Capacity, capital, collateral, and character

    • D. 

      Character, collateral, capacity, and credit limit

  • 10. 
    Getting credit is not cheap. However, which is usually the least expensive over time?
    • A. 

      Rent-to-own services

    • B. 

      Bank loan

    • C. 

      Payday loan

    • D. 

      Refund anticipation services

  • 11. 
    A home equity loan:
    • A. 

      Replaces a mortgage at a lower interest rate

    • B. 

      Has the same monthly payment

    • C. 

      Is a loan designed for purchasing a house

    • D. 

      Can be used to pay for any kind of expense

  • 12. 
    If someone offers you a loan, what can you do to make sure it is a good deal?
    • A. 

      Check to make sure the loan provider is reputable

    • B. 

      Shop around and compare all terms and conditions

    • C. 

      Make sure you can afford the loan

    • D. 

      All are true statements

  • 13. 
    Which of the following is a short-term loan secured by your expected income tax refund?
    • A. 

      Payday loans

    • B. 

      Rent-to-own services

    • C. 

      Refund anticipation services

  • 14. 
    The Equal Credit Opportunity Act (ECOA):
    • A. 

      Ensures you are no discriminated against (e.g., because of your race, color, or gender)

    • B. 

      Requires lenders to notify you if you are denied a loan or credit

    • C. 

      Requires creditors to promptly credit payments and correct billing mistakes