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1.
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.
2.
Paying only the minimum amount due on a credit card bill _______.
Increases the cost and the time it takes to repay. It is best to repay higher interest rate loans faster.
3.
If you speak to your creditors when you start falling behind on your debts, they will refuse to work with you to make it easier to pay your debts.
False. Though it isn't guaranteed, they may revise your loan terms to make it easier for you to keep paying. It is in their interest to get at least something out of you.
4.
Which type of loan typically has a lower interest rate: secured or unsecured?
Secured. Secured loans, which are backed by collateral (such as a house or car), have lower interest rates, because having collateral lowers the risk of loss for the lender.
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.
If you file for bankruptcy, the bankruptcy will stay on your credit record for _______ years.
10. After 10 years, it will disappear.
7.
You probably have too much debt if the percentage of your monthly loan payments (excluding your mortgage) to your monthly take-home pay exceeds _______.
15%. Financial advisors agree that consumer debt in excess of 15–20% is probably too much debt and should be reduced.
8.
Making a plan to eliminate your debt begins with _______.
Setting a target date. Setting a target date will help you determine how much to pay toward the debt each month.