#1
Which of the following best describes the term 'credit'?
A form of money
An arrangement to receive goods or services now and pay for them later
A type of investment
A financial institution
#2
What is the purpose of a credit report?
To track one's spending habits
To monitor one's credit card balance
To provide a summary of one's credit history
To calculate one's income
#3
What is the term for the maximum amount of credit a lender is willing to extend to a borrower?
Credit limit
Interest rate
Loan term
Credit score
#4
What is the term used to describe the process of borrowing money to invest?
Debt consolidation
Mortgaging
Leveraging
Collateralizing
#5
Which of the following is an example of revolving credit?
Mortgage loan
Auto loan
Credit card
Student loan
#6
What does APR stand for in the context of borrowing?
Annual Percentage Rate
Average Payment Return
Adjusted Payment Ratio
Annual Payment Requirement
#7
Which of the following is NOT typically considered when determining one's credit score?
Payment history
Length of credit history
Marital status
Types of credit used
#8
What is the difference between secured and unsecured loans?
Secured loans require collateral while unsecured loans do not
Unsecured loans have lower interest rates than secured loans
Secured loans are only available to individuals with high credit scores
Unsecured loans have longer repayment periods than secured loans
#9
Which of the following is an advantage of using credit cards for purchases?
High interest rates
Increased risk of overspending
Fraud protection
Limited acceptance by merchants
#10
What does 'debt consolidation' refer to?
Taking on additional debt
Paying off multiple debts with a single loan
Decreasing one's credit score
Avoiding repayment of loans
#11
What is the concept of 'loan-to-value ratio' (LTV) in lending?
The percentage of a property's value that can be borrowed
The interest rate charged on a loan
The amount of money borrowed
The period over which a loan is repaid
#12
Which of the following is NOT a factor influencing loan interest rates?
Credit score
Loan amount
Type of employment
Economic conditions
#13
In the context of mortgages, what does 'prepayment penalty' refer to?
A fee charged for making a mortgage payment before its due date
A penalty for paying off a mortgage early
An incentive for making additional mortgage payments
A discount on the interest rate for early repayment
#14
What is the term for a period during which borrowers are not required to make payments on their loan?
Grace period
Amortization period
Maturity date
Forbearance
#15
What is the term for the process of transferring an existing loan to another lender with better terms?
Loan consolidation
Loan origination
Loan refinance
Loan modification