Loan Basics
What do you call money borrowed from a lender that must be paid back?
Loan.
If the interest rate on a loan is very high, will the total repayment cost be more or less than the loan amount?
More.
What is the name of Canada’s central bank?
Bank of Canada.
What is the term for the amount of money you borrow from a bank?
Principal.
If someone borrows $500 and repays $500, wad there interest on the loan?
No.
What is the most common type of loan people take in Canada?
Mortgage.
What do you call the extra money you pay to the lender for borrowing a loan?
Interest.
If you borrow $200 and end up paying back $250, how much was the interest?
$50.
What does the term "credit score" mean?
A number that shows how trustworthy you are to lenders?
What is the term for the percentage rate the lender charges you on the loan?
Interest Rate.
True or False: A higher interest rate means you pay less over time.
False.
If a person borrows money to start a business, what kind of loan is this usually called?
Business Loan.
What is the total amount you must repay for a loan called?
Principal + Interest.
If someone wants to borrow $200 and promises to pay back $300 next week, is that a smart decision?
No.
What type of loans do students take out for university and college?
Student Loan.