Choose wisely. There is only one correct answer to each question.
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1.
Your creditors may be willing to work out debt repayments rather than have you file for bankruptcy.
True. Creditors would rather receive some payment than risk not getting any payments should you resort to bankruptcy.
2.
Which of the following is TRUE about using a consumer credit counseling or debt consolidation service?
Creditors are willing to work with these services to renegotiate or consolidate your debt. Although creditors are willing to work with you and a credit counseling or debt consolidation service, you must be wary because some are shady, charge high fees, or could damage your credit rating if they renegotiate your debt.
3.
When calculating payments for debts that use different interest rates, it is most effective to use the debt with the highest interest rate.
True. This can help you pay off your total debt faster.
4.
You will usually have to pay additional costs for the privilege of consolidating your loans.
True. Take these costs into account before you consolidate loans.
5.
If you borrow money to buy an item that is able to provide cash income to you, that item can be called _______.
An investment. Investments provide a return to you, such as income.
6.
Monthly debt payments are current expenses that you need to pay in your budget.
False. Monthly debt payments are ghosts of prior expenses for which you did not have enough cash to pay at the time.
7.
Which of the following are ways to lower your monthly debt payments?
All of the above. These are all ways to reduce your monthly debt payments.
8.
When you pay back a loan, the amount of the monthly loan payments is determined by _______.
All of the above. Principal, interest, and the term (months) of the loan determine how much each monthly payment should be.