U6 L2 Credit Basics

Question 1

source of credit that may combine elements of open and closed-end credit and usually have higher interest rates and fees than other forms of credit

Answer 1

alternative credit

Question 2

loan based on the value of personal property

Answer 2

pawn loan

Question 3

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

Answer 3

payday loan

Question 4

short-term cash advance secured by a taxpayer’s expected tax refund

Answer 4

refund anticipation loan

Question 5

tangible items such as furniture, electronics or household appliances are leased with the condition that the item will be owned by the renter if the term of rent is completed. The cumulative end amount a consumer pays to lease an item is typically much higher than if the consumer bought the item from the onset

Answer 5

rent-to-own

Question 6

borrower gives the lender his/her automobile title in exchange for a set amount of cash. The lender holds the title until the loan is repaid. If the loan is not repaid as agreed, the lender keeps title to the item.

Answer 6

title loan