Differentiating between secured and unsecured loans

Updated Jun 30, 2022

Students explore characteristics of secured or unsecured types of credit by playing a sorting game.

Big idea

Borrowers may receive different types of loans based on their credit history.

Essential questions

How might a person’s credit habits and decisions influence their ability to borrow money?
What types of loans help people pay for large purchases or expenses?

Objectives

Understand the characteristics of secured and unsecured loans in order to make informed borrowing decisions
Identify items that could be purchased using a secured loan versus an unsecured loan

What students will do

Work collaboratively to sort game cards with loan characteristics into two piles: secured and unsecured loans.
Work collaboratively to sort game cards with items to show which ones can likely be purchased with secured loans and which can likely be purchased with unsecured loans.

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Teacher guide

cfpb_building_block_activities_differentiating-secured-unsecured-loans_guide.pdf

Note: Please remember to consider your students’ accommodations and special needs to ensure that all students are able to participate in a meaningful way.

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Key information for this activity

Building block

(What are the building blocks?)

Financial knowledge and decision-making skills

Topic

Borrow (Getting loans, Managing credit)

School subject

CTE (Career and technical education)

Audience

Grade level: High school (9-10), High school (11-12)

Age range: 13-15, 16-19

Student characteristics: English language learners, Special education, Low income, Rural, Urban

Activity characteristics

Activity type: Small group

Teaching strategy: Cooperative learning, Gamification

Bloom’s Taxonomy level: Understand, Apply

Activity duration: 45-60 minutes

National standards

(What are the national standards? )

Standards: V. Managing credit

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