Q1:Collateral:

1. increases the interest rate on loans.

2. is required on all loans.

3. is used on unsecured loans.

4. gives the lender additional recourse if the payments are not made.

Q2:The advantage to financing a car for a long period of time (of up to seven years) is

1. the car will be worth more by the time you pay off the loan.

2. you will build equity in the car faster.

3. your monthly payment will be lower.

4. you will be able to sell the car before you pay off the loan and have money to pocket