Only one-third of Americans can pass a basic financial literacy quiz. Do you think you can do better?
Take our financial literacy quiz below and get three or more questions right to pass. Ready to begin…
True or False: The best time to shop for a car loan is at the dealership.
Answer: False. The best time to start shopping for a car loan is before you even start searching, so you know how much you can afford. You will also typically get better loan terms at credit unions like PCU than you would at a dealership.
True or False: You can afford to rent an apartment if the cost of rent and all additional expenses align with your financial goals.
Answer: True. When looking to rent a place, you need to include all expenses like utilities, parking or public transportation costs, and the security deposit. If all of these are within your budget, then you can afford it.
Which loan term is best if you want to reduce the total amount you will repay over the life of the loan: 3-year or 10-year?
Answer: 3-year. With a shorter loan, your monthly payments will be higher but you will pay less in interest, meaning you will pay less overall.
Choose the two that loan payments are based on: APR, Interest Rate, or Length of the Loan.
Answer: Interest Rate and the Length of the Loan. The cost of your monthly loan payments is only based on the length of the loan, or how long it will take you to pay it back, and the interest rate. The two factors determine how quickly you will pay off the principal loan, as well as the amount you will pay in interest and how long it will take to pay that off.
True or False: If you have a balance on your credit card, the best way to pay it off is to pay more than the minimum monthly payment on all your credit cards.
Answer: False. The best way to pay off credit card debt is to pay the maximum your budget will allow on the card with the highest interest rate. If you want to know more about paying off credit card debt look out for our blog on the subject later this month.
How did you do? If you want to learn more or need to study some financial basics check out the National Financial Educators Council, where this quiz was adapted from, or contact us today! We are always here to help you reach your financial goals!
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