Exam 7: Student and Consumer Loans: The Role of Planned Borrowing

With a(n)________ installment loan,interest charges are calculated using the original balance,and these charges are then added to the loan.

According to the Keown book,how do you finance your college education without mortgaging your future?

Describe in detail the characteristics of the direct subsidized and unsubsidized student loans from the Federal government.

Which one of these clauses is not found in a typical loan contract?

What is the type of loan where the entire interest charge is subtracted from the loan principal before you receive the money,and at maturity you repay the entire principal?

Defaulting on a secured loan may lead to the collateral being repossessed.

What happens when you default on a car loan where your Title is held as collateral?

What is your potential liability from the deficiency payments clause if you default?

Student loans are a smart source of financing for school because you only pay part of the interest charges and the rest is subsidized by the lender.

Congratulations! You have just graduated from college and are determining what your monthly student loan payments will be.After consolidating all of your loans,you have a balance of $18,000.At 8% APR for 10 years,what will your monthly payments be?

According to the Keown book,a(n)________ is a loan involving a formal contract that details exactly how much you're borrowing and when and how you're going to pay the loan back.

The finance charges for a loan may include

Your brother,a banker,has just approved a loan for you,an add-on interest loan.You will borrow $2,000 for one year with a 12% annual interest rate.What is your monthly payment?

Many lenders will hold Dave to the 28/36 rule in evaluating his application for a mortgage.What does the 36 mean?

Ronald is borrowing $20,000 using the discount method.His bank is offering him an annual percentage rate of 8.5% and he is taking out the loan for 24 months.How large of a check will Ronald receive from this loan when he leaves the bank? How much will he repay?

Under a Federal Direct Loan,you don't begin making payments until six months after graduation.

Why is the debt limit ratio and 28/36 rule more important to conservative lenders like Banks and Credit Unions and not so important for lenders like small Finance companies and Payday lenders?

A federal direct subsidized loan has tremendous advantages over other types of loans,including

The annual percentage rate is the simple percentage cost of all finance charges over the life of the loan on an annual basis.

What is the name of the interest rate banks charge to their most creditworthy customers?