Unit 3 Review

A shorter auto loan term means ____ monthly payments & ____ total interest you'll pay.

higher, less

How are credit cards and debit cards different?

A credit card can offer perks such as purchase protection

All of the following can happen when you fail to make a mortgage payment EXCEPT:

After one missed payment, you can lose your home

How do you avoid paying interest on your credit card (or any other loan for that matter)?

Always make the full payment on time

Which of the following is typically a SECURED loan?

Auto loan

If the collateral for your secured loan can be taken away, why get a secured loan at all?

Because they usually have a lower interest rate

True or False: Landlords are required to submit your payment history, which can boost your credit score.

False

Where do banks get the money to lend out to consumers?

From their clients savings account

When can personal loans be a better option than credit cards?

If you want a lower interest rate

What is the purpose of a Schumer box when applying for a credit card?

It summarizes information like interest rates, fees, and grace periods

Which of the following is NOT a typical type of credit?

Pre-paid debit card

How do federal student loans differ from private student loans?

Private loan repayment may start while you're in school

How do banks make money off of the credit they issue?

They charge a high interest rate on the loan

True or False: A cosigner's credit history can be affected by the loan they are cosigned on.

True

Why does the amount of INTEREST you owe on a loan decrease over time?

With each payment, principal decreases, so interest lowers

Which is TRUE about Payday loans?

You are charged a 1-time fee for the loan

Which is TRUE when you make only the minimum payment each month?

You are charged interest on the remaining balance

Which of the following is TRUE about an auto LOAN and a LEASE?

You make monthly payments on both

What may NOT impact the interest rate on your loans?

Your level of education

When repaying your Federal student loans...(hint: choose 2 correct answers)

a loan servicer will contact you before repayment begins; you can choose from different repayment plans