Credit & Debt Basics

The bank adds the interest to the .... to calculate the monthly payment of your loan.

• principal

• tenure

• charge account

• credit file

What did Mr. Fanelli and his wife NOT use the charge card for?

• bought their furniture

• bought tickets

• bought airplane

• went for vacation

My friend offered the bank his house as .... when he needed a loan.

• collateral

• debt

• term

• tenure

In the video we watched about PayDay lending, the expert says that "any other type of loan" is a better option than a payday loan.

• True

• False

Which type of student loan offers students the most benefits?

• federal unsubsidized loan

• federal subsidized loan

• private student loan

• mortgage loan

How do lenders make money by loaning it out?

• They claim property to pay the loans.

• They invest in the community of borrowers.

• They charge interest on the principal amount borrowed.

Consumers can rely on the ____________ to compare loans because it is the TOTAL cost of borrowing money.

• FDIC

• AYR

• APR

Emery applies for a loan online to help cover living costs while in college. Later, she notices her payments aren’t impacting the balance much. Looking closer, she finds extra fees in the agreement. Which type of predatory loan offer did Emery experience?

• Bait and switch

• Payday loan

• Hidden fees

• Phishing scam

The Brown family owns a house worth $300,000 and they still owe $150,000 on their mortgage. They want to use their equity to make some home improvements and so want to borrow money. How much equity do they have in their home?

• $150,000

• $250,000

• $450,000

• $300,000

Before you sign ANYTHING or a loan, it is important that you understand all the terms and conditions.

• True

• False