Intro to Credit

What type of loan is used for tuition?

What is collateral?

• Something that the bank gives you with a loan

• Something of value that the bank can take if you default on the loan

• A document that you sign when taking out a loan

• A legal binding document that you sign after paying back the loan

Which type of loan requires collateral?

• Unsecured

• Secured

Which of these is NOT included in every loan?

• Principal

• Interest rate

• Collateral

• Loan term

Which type of loan is used for expenses in between pay periods?

What is "interest"?

• The amount you are borrowing

• The amount of time you have to pay back a loan

• How much money you have in the bank

• The fee for borrowing money

What is a "loan term"?

• The fee for borrowing money

• How much money you have in the bank

• The amount of time you have to pay back a loan

• The amount you are borrowing

What is the "principal" of a loan?

• How much money you have in the bank

• The amount you are borrowing

• The fee for borrowing money

• The amount of time you have to pay back a loan

Secured loans typically have lower interest rates than unsecured loans.

• True

• False

Unsecured loans are more risky for lenders than unsecured loans.

• True

• False