| A | B |
|---|
| A line of credit established in advance so the borrower does not have to apply for credit each time new credit is desired. | Open-end Credit |
| A loan which the borrower must repay the amount in a specified number of equal payments. | Closed-end Credit |
| Short‐term loan that provides immediate cash by securing a borrower’s written check or receiving authorization for automatic withdrawal from the borrower’s depository institution account. | Payday Loan |
| Tangible items leased with the condition that the item will be owned by the renter if the term of rent (contract) is completed. | Rent-to-own loan |
| A loan based on the value of personal property. | Pawn Loan |
| The borrower gives the lender his/her automobile title in exchange for a set amount of cash. | Title Loan |
| Short‐term cash advance secured by a taxpayer’s expected tax refund. | Refund anticipation loan |
| True or False? Annual interest rates for alternative loans can be as high as 300%. | True |
| True or False? All lenders check a person’s credit report and score during the loan approval process. | False |
| True or False? The terms of a loan are always consistent for the length of the loan. | False |
| True or False? An example of closed‐end credit is a secure credit card. | False |
| True or False? If an individual does not meet the credit terms for a pawn loan, the lender will keep the property. | True |
| True or False? Evaluating the purpose of credit is an important consideration to using credit responsibly. | True |
| True or False? Depending on the credit terms, if a person has a late payment, consequences including higher interest rates, may occur. | True |
