Exam 9: Personal Loans

You have a home with a market value of $200,000. Your total equity in the home is $40,000. The maximum home equity loan available if the bank will loan 80% based on equity invested is

In determining the amount of your loan, you should ask for about 20% more than you need in order to give yourself financial flexibility in the future.

The monthly payment for a loan is dependent only on the size of the loan and the interest rate.

What should you not consider when selecting a vehicle?

Buying a car from a dealer with a set price (a no-haggle dealer) is usually more stress-free and less time consuming.

The most favorable car financing is that of

A personal loan is different from a credit card in that it is normally used to finance one large purchase.

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

In a loan repayment schedule, the term amortized refers to

Debt consolidation loans can be used to

Having a longer-term loan

You could reduce the interest rate you are paying on loans by

Which of the following is not included in the loan contract?

When considering how much money to spend on the purchase of a new car, you must consider how your choices affect your spending on other needs. The ________ solution limits your credit card purchases to what you can afford to pay off when your credit card bill arrives each month to avoid accumulation of debt.

The cost of financing with a payday loan is more reasonable than the cost of obtaining credit through a credit card.

Collateral is defined as assets of the lender that back a secured loan in the event of default.

You obtain a loan of $3,000 based on simple interest with an annual interest rate of 12%. At the end of the first month, the interest owed on $3,000 is

If you borrow an $8,000, 6.75% home equity loan, what is your tax savings for one year assuming your marginal income tax rate is 15%, and assuming the funds are spent on improving your home?

A loan provided to finance the expenses of a person pursuing a college degree is called a(n) ________.

The cost of leasing a car versus purchasing one