Financial Counseling Certification Practice Exam 2026 – Complete Prep Guide

Question: 1 / 400

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

Refinancing

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.

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Debt consolidation

Credit adjustment

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