Exam 7: Using Consumer Loans

Besides the finance charge,you should also consider ____ when you shop for a consumer loan.

Loans from whole life insurance policies are structured so that the interest rate on the loan is set at the time the loan is made.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Your budget should be considered [before | after] taking on a large consumer loan.

Finance companies are generally more selective in granting loans than credit unions.

Which of the following is accurate concerning 529 college savings plans?

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -[Interim financing | Single-payment loan] is used in situations where the funds to be used for repayment are known to be forthcoming.

Borrowing to pay for a college education is a legitimate use of credit.

Credit unions offer some of the most attractive loan terms available.

A single-payment loan is advantageous only if

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -You are borrowing $5,000 at 9%.You may choose a 24 or 36 month repayment plan.Monthly payments will be higher with the [24 | 36] month plan.

From a financial planning perspective,you should ask yourself how low of a payment you can get when considering using consumer loans.

Rebates are almost always more cost effective than the lower interest rate offered on automobile loans.

Installment loans are typically repaid in monthly payments.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -The majority of consumer loans are made with [fixed | variable] interest rates.

Simple interest on an installment loan is charged only against the initial loan principal.

The majority of loans made by savings and loan associations are ____ loans.

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -Calculating interest using the [discount | simple interest] method will result in the higher APR on a single-payment loan.

It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates.

Sales finance companies

Choose the word or phrase in [ ] which will correctly complete the statement. Select A for the first item, B for the second item, and C if neither item will correctly complete the statement. -A 529 plan is a [savings | lending] plan.