#1
Which of the following is a common type of consumer loan?
Mortgage
Operating lease
Commercial paper
Preferred stock
#2
What does APR stand for in the context of consumer loans?
Annual Percentage Rate
Average Payment Requirement
Annual Profit Ratio
Asset Price Reduction
#3
What is the term for the total amount of money borrowed in a consumer loan?
Principal
Interest
Payment
Term
#4
Which of the following is a common type of consumer loan designed to finance the purchase of a vehicle?
Personal loan
Student loan
Auto loan
Home equity loan
#5
What is the typical range of loan terms for consumer loans?
1-5 years
6-10 years
11-15 years
16-20 years
#6
Which of the following is NOT typically considered a factor in assessing a borrower's creditworthiness?
Income level
Credit score
Number of social media followers
Debt-to-income ratio
#7
What is the term for a loan that is secured by collateral?
Unsecured loan
Variable rate loan
Secured loan
Term loan
#8
What is the purpose of a grace period in a consumer loan?
To extend the loan term
To allow for late payments without penalty
To increase the interest rate
To decrease the loan amount
#9
Which of the following is a characteristic of a fixed-rate loan?
Interest rate fluctuates over time
Monthly payments vary
Interest rate remains constant
Loan amount changes periodically
#10
What is the term for the process of evaluating a borrower's creditworthiness and ability to repay a loan?
Credit check
Loan verification
Income assessment
Underwriting
#11
What is a balloon payment in the context of consumer loans?
An extra payment made at the beginning of a loan term
A payment made to reduce the loan principal
A large final payment at the end of the loan term
A payment made if the borrower defaults on the loan
#12
What is debt consolidation in the context of consumer loans?
Taking out a new loan to pay off multiple existing debts
Renegotiating the terms of an existing loan
Paying off a loan early
Transferring debt to a collection agency
#13
What is the primary difference between a secured loan and an unsecured loan?
Interest rate
Loan amount
Collateral requirement
Loan term
#14
In the context of consumer loans, what is the role of a cosigner?
To provide collateral for the loan
To serve as a character reference for the borrower
To manage the loan payments on behalf of the borrower
To share responsibility for repaying the loan
#15
In the context of consumer loans, what is the meaning of 'prepayment penalty'?
A fee charged for paying off a loan early
A discount for making payments on time
A penalty for late payments
A fee for applying for a loan