Credit Basics

A line of credit established in advance so the borrower does not have to apply for credit each time more credit is needed.

• payday loan

• open-end credit

Short-term loan that provides immediate cash by securing a borrower's written check . . .

• pawn loan

• payday loan

• refund

A loan which the borrower must repay the amount in a specified number of payments of equal amounts.

• closed-end credit

• refund

• title loan

Short-term cash advance secured by taxpayer's tax refund.

• rent-to-own loan

• anticipation loan

• pawn loan

A loan based on personal property.

• pawn loan

• payday loan

• title loan

Annual interest rates for alternative loans can be as high as 300%.

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• false

All lenders check a person's credit report and score during the loan approval process.

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• false

The borrower gives the lender his/her automobile title in exchange for a set amount of cash.

• rent-to-own

• title loan

Evaluating the purpose of credit is an important consideration to using credit responsibly.

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• false

If an individual does not meet the credit terms for a pawn loan, the lender will keep the property.

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