Understanding Loans and Their Types

Front

What is the age criteria for a co-borrower in a joint loan?

Back

18-60

Front

What is a loan that is received by the borrower in cash called?

Back

Cash loan

Front

What is the main difference between a fixed-rate loan and a variable-rate loan?

Back

Fixed-rate loans have constant interest rates, while variable-rate loans have rates that can change over time.

Front

What is a loan used to buy a house called?

Back

Mortgage

Front

Which of the following is an example of an unsecured loan?

Back

Student loan

Front

What is a secured loan?

Back

A loan backed by collateral, which the lender can claim if the borrower defaults.

Front

What is an unsecured loan?

Back

A loan that does not require collateral and is based on the borrower's creditworthiness.

Front

What is the purpose of a credit score in loan applications?

Back

It helps lenders assess the risk of lending money to a borrower.

Front

What is a personal loan?

Back

A type of unsecured loan that can be used for various personal expenses.

Front

What is the difference between a line of credit and a loan?

Back

A line of credit allows borrowing up to a limit and paying interest only on the amount used, while a loan is a fixed amount borrowed with a set repayment schedule.