Financial Counseling Certification Program (FiCEP) Practice Exam

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Prepare for the Financial Counseling Certification Exam. Use flashcards and multiple choice questions with hints and explanations to boost your readiness. Ace your certification!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What term describes increasing a monthly payment beyond the minimum required?

Refinancing
Paying more on the principal
Debt consolidation
Credit adjustment

The correct answer is: Paying more on the principal

The term that describes increasing a monthly payment beyond the minimum required is paying more on the principal. When individuals make payments that exceed the minimum requirement, they are effectively reducing the principal amount of the debt faster than scheduled. This action can lead to a decrease in the total interest paid over the life of the loan and can help in paying off the debt more quickly. For example, if a person has a loan with a monthly payment of $200, but they decide to pay $250 instead, that extra $50 directly reduces the principal balance. This practice is beneficial in managing and ultimately reducing debt more efficiently.