#1
Which of the following is an example of a secured loan?
Credit card debt
Student loan
Mortgage loan
Payday loan
#2
What does APR stand for in the context of borrowing?
Annual Payment Requirement
Average Percentage Rate
Annual Percentage Rate
Annual Payment Return
#3
What is the consequence of defaulting on a loan?
Your credit score will increase
You may face legal action
You will receive a reward
Your loan term will be extended
#4
What is the term for the fee charged by a lender for borrowing money?
Interest
Dividend
Premium
Commission
#5
Which of the following is an example of revolving credit?
Auto loan
Personal loan
Credit card
Student loan
#6
What is the primary purpose of a credit score?
To determine how much money you have
To evaluate your spending habits
To assess your creditworthiness
To calculate your savings rate
#7
Which of the following factors typically affects the interest rate on a loan?
Borrower's credit score
Lender's location
Length of the loan term
Borrower's age
#8
What is the purpose of a cosigner in a loan agreement?
To receive a portion of the loan amount
To guarantee repayment if the borrower defaults
To negotiate the interest rate with the lender
To transfer the loan to another party
#9
What does 'APY' stand for when discussing savings accounts?
Annual Percentage Yield
Average Personal Year
Annual Payment Year
Average Payment Yield
#10
Which type of loan generally has a lower interest rate?
Fixed-rate loan
Variable-rate loan
Secured loan
Unsecured loan
#11
What is the key difference between a secured loan and an unsecured loan?
Interest rate
Credit score requirement
Presence of collateral
Loan term duration
#12
What is the 'debt-to-income ratio' used for in lending?
To assess the borrower's credit history
To calculate the borrower's potential return on investment
To evaluate the borrower's ability to manage additional debt
To determine the borrower's total assets
#13
What is the purpose of a grace period on a loan?
To reduce the interest rate
To extend the loan term
To allow extra time for repayment without penalty
To increase the loan amount
#14
What is a 'prepayment penalty' in the context of borrowing?
A fee charged for paying off a loan early
A discount offered for early payment
An incentive for borrowers with good credit
A reward for consistent payments
#15
What is 'compound interest' in the context of borrowing?
Interest calculated on the initial principal and any interest accumulated
Interest paid only on the principal amount
Interest calculated at a fixed rate
Interest waived for certain borrowers