the amount over which you pay back your principal and interest
term
principal
interest
Why might someone consider choosing a loan with the lowest monthly payment?
Low payments eventually lead to lower total interest paid
Low payments indicate a low interest rate
Low payments fit better in their monthly budget
Low payments help you pay off your loan more quickly
Each of the following represents an installment loan EXCEPT…
auto loan
home mortgage
credit card
student loan
amount you are borrowing
interest
principal
term
percentage you are being charged for the right to borrow the money
term
principal
interest
This type of loan does not require collateral so it is more risky for the lender
secured
unsecured
Your credit score and the loan determine the interest rate that will be charged
True
False
interest rate can change during the duration of the loan
variable rate
fixed rate
Which word represents the total cost of the item you’re purchasing on credit minus any down payment you make upfront?
APR
term
interest rate
principal
interest rate remains constant during the duration of the loan
fixed rate
variable rate
This type of loan requires collatoral the lender can take if you don't pay
secured loan
unsecured loan
If you purchase a $750 Playstation on a credit card and make the minimum payment, about how long will it take to pay it off?
2 years
1 year
over 5 years
3 months