Assess Yourself
Are you ready to take this lesson's quiz? The questions below will help you find out. Make sure you understand why each answer is correct—if you don't, review that part of the lesson.
What is the principal balance on a loan?
- the amount that it costs to take out a loan
- the amount that needs to be paid back on a loan
- the monthly payments on a loan
- the length of time to pay a loan back
The principal balance is the amount the borrower currently owes on their loan before interest fees.
The principal balance is the amount the borrower currently owes on their loan before interest fees.
The principal balance is the amount the borrower currently owes on their loan before interest fees.
The principal balance is the amount the borrower currently owes on their loan before interest fees.
What type of loan can someone with bad credit receive without having to put up collateral?
- payday loan
- title loan
- mortgage loan
- line of credit
Most loans require collateral—that is, a way of protecting the lender, just in case you can no longer make your loan payments. However, some loans do not require collateral because they are usually for a small amount of money. These loans are offered mostly to people with bad credit and must be paid back as soon as the borrower receives their next paycheck.
Most loans require collateral—that is, a way of protecting the lender, just in case you can no longer make your loan payments. However, some loans do not require collateral because they are usually for a small amount of money. These loans are offered mostly to people with bad credit and must be paid back as soon as the borrower receives their next paycheck.
Most loans require collateral—that is, a way of protecting the lender, just in case you can no longer make your loan payments. However, some loans do not require collateral because they are usually for a small amount of money. These loans are offered mostly to people with bad credit and must be paid back as soon as the borrower receives their next paycheck.
Most loans require collateral—that is, a way of protecting the lender, just in case you can no longer make your loan payments. However, some loans do not require collateral because they are usually for a small amount of money. These loans are offered mostly to people with bad credit and must be paid back as soon as the borrower receives their next paycheck.
What is a consequence of missing loan payments?
- minor fines
- more interest fees
- seizing of personal assets
- forced necessity to take out another loan
Missing loan payments is never good and will result in major penalties assessed to you, such as repossessing something you own—like your car or even your house.
Missing loan payments is never good and will result in major penalties assessed to you, such as repossessing something you own—like your car or even your house.
Missing loan payments is never good and will result in major penalties assessed to you, such as repossessing something you own—like your car or even your house.
Missing loan payments is never good and will result in major penalties assessed to you, such as repossessing something you own—like your car or even your house.
What is not included in a loan application package?
- W-2 forms
- two recent bank statements
- credit history over the past 10 years
- two years of tax returns
A loan application package will include documentation proving how much money you earn, how much money you currently have, and how much you have been paying in taxes.
A loan application package will include documentation proving how much money you earn, how much money you currently have, and how much you have been paying in taxes.
A loan application package will include documentation proving how much money you earn, how much money you currently have, and how much you have been paying in taxes.
A loan application package will include documentation proving how much money you earn, how much money you currently have, and how much you have been paying in taxes.
What should never change from month to month on a loan payment schedule?
- the interest fee each month
- the amount of each monthly payment
- the principal balance
- the total amount of interest paid
Before you begin to pay off a loan, a payment schedule will be created for you. As you pay each month, the total you must pay the following month decreases. This means other values, like the interest, will also decrease.
Before you begin to pay off a loan, a payment schedule will be created for you. As you pay each month, the total you must pay the following month decreases. This means other values, like the interest, will also decrease.
Before you begin to pay off a loan, a payment schedule will be created for you. As you pay each month, the total you must pay the following month decreases. This means other values, like the interest, will also decrease.
Before you begin to pay off a loan, a payment schedule will be created for you. As you pay each month, the total you must pay the following month decreases. This means other values, like the interest, will also decrease.
Which criterion for a loan evaluation involves a lender looking up your credit history and credit score?
- capacity
- conditions
- capital
- character
A lender can get a good gauge on the type of person you are and how well (or how poorly) you handle credit, just by looking at your credit history and score.
A lender can get a good gauge on the type of person you are and how well (or how poorly) you handle credit, just by looking at your credit history and score.
A lender can get a good gauge on the type of person you are and how well (or how poorly) you handle credit, just by looking at your credit history and score.
A lender can get a good gauge on the type of person you are and how well (or how poorly) you handle credit, just by looking at your credit history and score.
Summary
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