Question 1

It's a method of making large purchases that you cannot afford under normal circumstances

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What is the purpose of debt?

Question 2

retention of ownership

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What is one advantage of debt financing?

Question 3

False

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You can go to jail for debt

Question 4

False

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Debt goes away over time when you do not pay it.

Question 5

debt can be expensive with interest charges and bank fees

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What is one disadvantage of debt financing?

Question 6

mortgage rate does not change

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What is one advantage of a fixed mortgage?

Question 7

potential for mortgage rate to increase

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What is one disadvantage of an ARM?

Question 8

lower initial mortgage rate

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What is one advantage of an ARM?

Question 9

locked into the rate if you cannot refinance

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What is one disadvantage of a fixed mortgage?

Question 10

mortgages

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Leverage in personal finance includes students loans, car loans and

Question 11

take out loans or lines of credit to invest in the stock market

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While leverage in personal investing refers to buying on margin, some people tend to

Question 12

by building equity

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How are you using leverage from a mortgage on your home?

Question 13

by getting an education

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How are you using leverage on a student loan?

Question 14

necessary for you to earn an income with trasportation

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Leverage on a car loan is

Question 15

federal loans

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The 2 types of students loans are private and

Question 16

direct plus

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The 3 types of students federal loans are unsudsidized loans, subsidizes and

Question 17

10-Year Standard repayment plan

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For your student loan, if you take no action after you graduate, you will be automatically enrolled in the

Question 18

wage garnishment

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One of the consequenses for defaulting your student loan is

Question 19

It minimizes the risk for lenders.

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Why is collateral important?

Question 20

their borrowers will never be able to pay off their loans on-time but they still lend anyway.

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Many predatory lenders realize

Question 21

Lenders "prey" on low-income borrowers who have little to no options for obtaining a loan

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Why are payday loans, auto title loans, and pawnshop loans referred to as predatory lending?

Question 22

mortgage industry

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Besides payday loans, auto title loans, and pawnshop loans, predatory lending is becoming more common in which industry?

Question 23

by paying more than the monthly payment of your mortgage

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How can you reduce the interest charges and lenght on your mortgage?

Question 24

TransUnion

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The 3 credit bureaus are Equifax, Experian, and

Question 25

850

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A credit score is a three-digit number, typically between 300 and

Question 26

credit score

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Your mortgage rates are based on your

Question 27

lenders

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Compound interest benefits

Question 28

borrowers

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Simple interest benefits

Question 29

interest

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An amortization talbe shows each periodic loan payment that is owed, typically monthly, and how much of the payment is designated for the principle versus

Question 30

medical expenses

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The leading cause of bankruptcy is

Question 31

It will be hard to get a new credit card

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One consequence from bankruptcy :

Question 32

when you have uncontrollable debt and you are not able to pay it back

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When is credit counseling is needed?

Question 33

repayment plan

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Credit conseling agencies provide you with various resources such as how to reduce your interest, pay off dates and creating a

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