Personal Finance - Debt Management Quiz
Test your knowledge of debt management with this quiz. Learn about types of debt, APR, loan terms, and more.
#1
Which of the following is a common type of debt?
Asset
Liability
Equity
Income
#2
What does APR stand for in the context of loans?
Average Payment Rate
Annual Percentage Rate
Asset Protection Ratio
Account Payment Return
#3
What is 'collateral' in the context of loans?
A person's reputation
An asset pledged as security for a loan
A type of debt instrument
The interest rate on a loan
#4
What does 'defaulting' on a loan mean?
Paying the loan off early
Failing to repay the loan according to the terms agreed upon
Changing the terms of the loan agreement
Seeking financial assistance
#5
What is a 'credit report'?
A report card from a financial institution
A report detailing a person's credit history
A report showing a person's annual income
A report showing a person's total assets
#6
What is a 'balloon payment' in a loan?
A payment made with inflated currency
A payment made towards interest only
A large final payment at the end of a loan term
A payment made by check
#7
What is 'debt consolidation'?
Acquiring more debt to pay off existing debt
Paying off multiple debts with a single loan
Transferring debt to another person
Ignoring debt completely
#8
What does 'credit utilization ratio' measure?
The amount of available credit being used
The amount of debt owed
The number of credit accounts open
The interest rate on credit cards
#9
What is a 'grace period' on a credit card?
The time before interest begins to accrue on new purchases
The time after the due date before late fees are applied
The period when no payments are due
The time to dispute charges on a statement
#10
What is the concept of 'snowball method' in debt repayment?
Paying off the debt with the highest interest rate first
Paying off the smallest debt first and then rolling payments to the next smallest
Paying off debt using only cash
Ignoring debt until it accumulates
#11
What is 'debt-to-income ratio' used for?
To measure a person's ability to save
To determine credit card limits
To assess a person's financial health
To calculate investment returns
#12
What does 'debt settlement' involve?
Transferring debt to another person
Negotiating with creditors to pay off debt for less than what is owed
Ignoring debt completely
Paying off debt using only cash
#13
What is the 'debt-to-equity ratio'?
A ratio comparing a company's debt to its equity
A ratio comparing a person's debt to their savings
A ratio comparing a person's debt to their income
A ratio comparing a person's debt to their assets
#14
What is 'bankruptcy'?
A method of increasing debt over time
A legal process that can help individuals or businesses with debt they can't repay
A method of paying off debt using only cash
The act of giving up on debt repayment
#15
What is 'predatory lending'?
A method of increasing debt over time
Lending practices that exploit borrowers with unfair or deceptive terms
A method of paying off debt using only cash
The act of giving up on debt repayment
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