Planning Personal Finance - Consumer Credit

Borrowing money is always a bad thing

• False
• Depends on the situation
• Sometimes
• True

Unsecured loans are also known as

• student loans
• business loans
• personal loans
• secured loans

Personal loans are

• only available to individuals with good credit scores
• not secured against assets

• secured by collateral
• typically used for large purchases

One merit of personal loan is that

• it can only be used for emergencies
• it requires collateral
• it can be used for any purpose
• it has a high interest rate

One adavantage of personal loans over credit card is that

• higher interest rates
• no interest rates
• limited credit limit
• lower interest rates and ability to borrow more

One major issue with personal loans is that it encourages indiscriminate borrowing

• False

• Never

• True

Secured loan can be backed up against a life assurance policy

• No
• Sometimes
• Only for certain types of loans
• Yes

All things being equal, unsecure loans have lower rates than secured loans

• Sometimes
• False
• True
• Depends on the lender

What is the price paud for borrowing money called?

• principal
• deposit
• interest
• fee

What is a flat rate of interest?

• A flat rate of interest is a fixed interest rate that is charged on the principal amount for the entire duration of the loan or investment.
• A flat rate of interest is a variable interest rate that changes periodically based on market conditions.
• A flat rate of interest is a one-time fee charged by the lender for processing the loan.
• A flat rate of interest is a rate that is only applicable to certain types of loans or investments.