#1
What is the typical tenure for a personal loan?
1 year
5 years
10 years
15 years
#2
In the context of personal loans, what does 'EMI' stand for?
Equated Monthly Instalment
Every Month Income
Economic Monetary Investment
Easy Money Issuance
#3
What role does employment history play in personal loan approval?
No impact on approval
Determines the loan tenure
Affects income verification
Increases the interest rate
#4
What is the impact of pre-existing debt on personal loan eligibility?
Increases eligibility
Decreases eligibility
No impact on eligibility
Reduces interest rate
#5
How does a personal loan impact the borrower's credit score?
Has no impact on credit score
Increases credit score
May temporarily lower credit score
Only relevant for secured loans
#6
Which of the following factors is crucial for determining the interest rate on a personal loan?
Borrower's credit score
Loan amount
Loan tenure
All of the above
#7
What is the difference between a secured and an unsecured personal loan?
Secured loans require collateral, while unsecured loans do not
Secured loans have lower interest rates
Unsecured loans have longer tenure
Secured loans are available for shorter amounts
#8
What is the difference between a fixed-rate and a variable-rate personal loan?
Fixed-rate has a constant interest rate, while variable-rate can change over time
Fixed-rate loans have longer tenure
Variable-rate loans are riskier
Fixed-rate loans are only available for small amounts
#9
What is the impact of a high credit score on personal loan eligibility?
Decreases eligibility
Increases eligibility
No impact on eligibility
Increases interest rate
#10
How does a personal line of credit differ from a traditional personal loan?
A personal line of credit is a revolving form of credit, while a personal loan is a one-time lump sum
Both are the same and can be used interchangeably
Personal loans have higher interest rates
A personal line of credit is only for business purposes
#11
What is the grace period in personal loan repayments?
A period where interest is higher
A period after the due date with no penalty
The initial loan approval period
A period where the loan amount is reduced
#12
What is the Debt-to-Income Ratio (DTI) and why is it important in personal loan approval?
It measures the total debt payments divided by gross income
It is the total debt amount a person can have
It is irrelevant in personal loan approval
It measures the total assets of an individual
#13
How does prepayment affect the overall cost of a personal loan?
Reduces the total interest paid
Increases the loan tenure
Has no impact on the cost
Increases the interest rate
#14
What is the purpose of a co-borrower in a personal loan application?
To decrease the loan amount
To increase the interest rate
To share the responsibility of loan repayment
To act as a guarantor
#15
How does a debt consolidation loan work, and when might it be beneficial?
Combines multiple debts into a single loan, often with lower interest
Increases the total debt amount
Only available for business purposes
Suitable for short-term financial goals
#16
What is the significance of the APR (Annual Percentage Rate) in personal loans?
It represents the total cost of borrowing, including interest and fees
It is the maximum loan amount one can borrow
It is irrelevant in personal loan applications
It only considers the interest rate
#17
What is the concept of loan origination fees, and how do they affect the overall cost of a personal loan?
Fees charged for processing the loan application, increasing the overall cost
Fees refunded if the loan is repaid early
Fees associated with loan closure
Only applicable for secured loans