4
QuizMultiple Choice

How Credit Works

Question 4 • TX-Personal Financial Literacy and Economics

Which types of credit are most similar to each other?

Answer
A
auto loan and mortgage loan
B
auto loan and personal loan
C
credit card and mortgage loan
D
mortgage loan and personal loan

Explanation

An auto loan and a mortgage loan are both secured installment loans: you borrow a set amount, repay it over time, and the loan is backed by property. The vehicle secures an auto loan, while the home secures a mortgage. A personal loan is often unsecured, and a credit card is revolving credit, so those are less similar to a mortgage.

AI-written and checked against the verified answer.

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