Types of Loans
True or False: Signature Loans require the use of collateral
False, signature loans rely on the strength of the signature alone.
The total amount paid by a borrower to a lender for the use of credit.
Finance Charges
Legally binding agreement which states the terms of the loan
Contract
__________ are required to pay the full amount of the loan in the case that the primary signer defaults on the loan
Cosigner(s)
True or False: Closed-End Credit is also called a "Line of Credit"
False, lines of credit are Open-Ended Credit.
A Payday Loan is an example of______
Predatory Loans, Easy-Access Credit, or a High Interest Loan (Any of these answers)
Property that a borrower promises to give up in case of default
Collateral
The Equal Credit Opportunity Act ____
Prevents discrimination against consumers
What is the consequence of a low credit score?
Interest rates increase, and applications for loans denied (Either answer gets credit)
A record of a person’s credit history and financial behavior.
Credit Report
True or False: Credit Cards are a form of "Easy-Access Credit"
False (Your application will often be denied with poor credit). Easy Access means most anyone can be approved.
True or False: Making the min required payment every billing period is the most efficient way to pay off credit with lowest interest
False
True or False: By law, debtors cannot be forced to pay for goods and services when they have a legit dispute with the seller of those things.
True
The court may order ____ to set aside a portion of a debtor’s pay for creditors
Garnishment (Wage garnishment)
______________________________ enables someone to steal your personal information and make charges on your credit card.
Identity Theft
____ credit is used to acquire more expensive items, such as cars and homes
Closed-End
The annual cost of credit a lender will charge.
By Law, you are entitled to one free copy of your credit report from all three main credit reporting agencies every _____ months
12
A(n) ______________________________ is a business that specializes in debt collection.
Collections Agency
Someone who lends money at excessive rates of interest
Loan Shark
A common type of Open-Ended credit used by consumers is/are?
Credit Cards
The time between the billing date and the start of interest charges.
Grace Period
The Fair Credit Reporting Act _____
Requires accuracy and privacy of information contained in credit reports
This type of bankruptcy requires the sale of the debtor's/borrower's possessions to pay back their debt? (Hint: What Chapter?)
Chapter 7
The Truth in Lending Act requires creditors to ______
Disclose all terms of the loan in the contract (Fees, Penalties, Interest, etc.)