28
QuizMultiple Choice

The Cost of Credit

Question 28 • Personal Finance - EL3403

Which is an example of closed-end credit?

Answer
A
payday loan
B
title loan
C
home loan
D
credit card

Explanation

A home loan is closed-end credit because the borrower receives a set amount and repays it over a defined period, usually through scheduled payments. A credit card is open-end credit because the borrower can keep borrowing up to a limit as they repay. Payday and title loans are generally short-term loans, but the standard example of closed-end credit here is a home loan.

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