BPA Banking and Finance 2025/2026 QUESTIONS AND
ANSWERS GUARANTEE A+
installment loans - loans paid in regular payments overtime
ex. student loans, car payments
mortgage loan - installment written for along period of time, 15-30 years, usually for homes,
bank can take home if not paid back
seller-provided credit - stores that give credit to consumers
consumer finance companies - loans for people who might not get credit elsewhere, there is a
higher interest rate as there is higher risk
payday and advance services - short term loans until payday, lasts 5-14 days, higher fees and
interest rates
pawnship loan - based on value of item left with pawnbroker for security, can buy back item later
what does cost of credit include? - APR, fees for late payments and annual fees, fees for cash
advances,
cash advance - loan given in cash by credit card companies in anticipation of being able to be
paid back later
cosigner - someone who agrees to be respobsible for debt if main applicant cannot pay
grace period - amount of time to repay debt without interest charges
, What are the 3 c's of credit? - capacity, character, capitol
capcity - ability to repay a loan
character - if applicant has been able to repay in past
capitol - money you have beyond debts
credit limit - max a person can charge of a card
loan - money lent and paid back with interest
variable rate - interest rate that fluctuates over course of loan
fixed rate - interest stays the same over course of loan
finance charge - total cost to debtor to have lender finance loan
secured loan - loan is backed by collateral
unsecured loan - loan is not backed by collateral
garnishment of wages - creditor gets court order to obtain part of or all of debtor's paycheck, this
is done when there is failure of payment
reposses - take back an item, if item was offered as collateral and you stopped making payments
for it
ANSWERS GUARANTEE A+
installment loans - loans paid in regular payments overtime
ex. student loans, car payments
mortgage loan - installment written for along period of time, 15-30 years, usually for homes,
bank can take home if not paid back
seller-provided credit - stores that give credit to consumers
consumer finance companies - loans for people who might not get credit elsewhere, there is a
higher interest rate as there is higher risk
payday and advance services - short term loans until payday, lasts 5-14 days, higher fees and
interest rates
pawnship loan - based on value of item left with pawnbroker for security, can buy back item later
what does cost of credit include? - APR, fees for late payments and annual fees, fees for cash
advances,
cash advance - loan given in cash by credit card companies in anticipation of being able to be
paid back later
cosigner - someone who agrees to be respobsible for debt if main applicant cannot pay
grace period - amount of time to repay debt without interest charges
, What are the 3 c's of credit? - capacity, character, capitol
capcity - ability to repay a loan
character - if applicant has been able to repay in past
capitol - money you have beyond debts
credit limit - max a person can charge of a card
loan - money lent and paid back with interest
variable rate - interest rate that fluctuates over course of loan
fixed rate - interest stays the same over course of loan
finance charge - total cost to debtor to have lender finance loan
secured loan - loan is backed by collateral
unsecured loan - loan is not backed by collateral
garnishment of wages - creditor gets court order to obtain part of or all of debtor's paycheck, this
is done when there is failure of payment
reposses - take back an item, if item was offered as collateral and you stopped making payments
for it
