LIBF LiFE Quiz 6: Borrowing

When people borrow money, they have to pay back:

• A. What they borrowed + interest

• B. What they borrowed

• C. What they borrowed + interest + any fees charged

Which of the following items are you most likely to buy using credit?

• A. A music album

• B. A motorcycle

• C. Your weekly shopping

With a personal loan, each monthly repayment is the same.

• True

• False

How often is interest charged on overdrafts?

• A. Every day

• B. Once a week

• C. Once a month

When you use a credit card, you are charged interest:

• A. If you pay off all the credit for the month

• B. If you pay off some of the credit for the month

• C. However much credit you pay off

There are normally no age restrictions to borrow from an organisation offering credit.

• True

• False

Lenders do not have to state the APR when advertising a loan.

• True

• False

What type of APR ensures that loan repayments will be the same amount every month?

• A. Fixed APR

• B. Variable APR

Why do some people end up owing payday lenders a lot of money?

• A. They receive threats to make them pay more money

• B. A payday loan is a form of interest-free credit

• C. The APR is huge and people pay a lot in interest if they miss a repayment

What is the danger with interest-free credit that lasts for a limited time?

• A. No APR is stated by the lender

• B. The interest rate will rise, so you need to know when the interest-free period ends

• C. The interest rate will fall, so you need to know when the interest-free period ends