Credit & Debt: Checkpoint 2

Covers good vs bad debt, student loans, and strategies for paying off multiple debts.

Five questions on distinguishing helpful debt from harmful debt, and strategies to pay it down.

Question 1 of 5 'Good debt' is generally debt used to acquire:

Anything that feels necessary at the time An asset likely to hold or grow in value The largest loan you can qualify for A depreciating asset only

Question 2 of 5 'Leverage' in borrowing refers to:

A type of interest rate Using borrowed money to increase your buying power beyond your own cash A government loan program The minimum payment on a loan

Question 3 of 5 Compared to a private student loan, a federal student loan typically offers:

A guaranteed lower interest rate More flexible repayment and forgiveness options No repayment obligation Automatic cancellation after 5 years

Question 4 of 5 The debt avalanche method prioritizes paying off:

The smallest balance first The debt with the highest interest rate first Whichever debt is oldest All debts equally

Question 5 of 5 The debt snowball method is often recommended despite costing more in interest because:

It's required by law Early wins help keep people motivated to continue It always has a lower interest rate It automatically raises your credit score

← Back to Debt Repayment Strategies: Snowball vs Avalanche Next lesson → Understanding Your Credit Report

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