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Exam (elaborations)

Types of Credit Questions and Answers Grade A+

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  • Types of Credit
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  • Types Of Credit

Credit Any arrangement where you get "stuff" (money, goods, services), and agree to pay for it in the future Loan An agreement where you are credited with a fixed amount (usually of money) for a fixed period of time, usually with interest Interest Rate The percentage charged for the pri...

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  • November 6, 2024
  • 12
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • Types of Credit
  • Types of Credit
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1|Page | © copyright 2024/2025 | Grade A+




Types of Credit Questions and
Answers Grade A+
Credit


✓ Any arrangement where you get "stuff" (money, goods, services), and

agree to pay for it in the future




Loan


✓ An agreement where you are credited with a fixed amount (usually of

money) for a fixed period of time, usually with interest




Interest Rate


✓ The percentage charged for the privilege of borrowing money




Principal


✓ The amount you borrow




Term


✓ The amount of time you have to repay your principal




Collateral

Master01 | October, 2024/2025 | Latest update

, 1|Page | © copyright 2024/2025 | Grade A+

✓ Something valuable that the lender can take as payment if you can't

pay back your loan (like a house or car)




Co-signer


✓ Someone who legally agrees to take responsibility for a person's debt if

they cannot repay it




Installment loan


✓ Loan used to finance a specific purchase for a specific amount of

time; regular payments pay the interest and portion of the principal




Revolving credit


✓ Open line of credit that can be used for any purchases as long as

you're under the limit; payments vary monthly based on size of the debt




Secured debt


✓ Debt tied to a specific tangible asset that can be used as collateral

and reposed if payments are no tmade




Unsecured debt




Master01 | October, 2024/2025 | Latest update

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