Question 1

Installment loans are repaid in monthly payments.

Accepted Answer

A) True 
 B)False

Question 2

When the simple interest method is used to determine finance charges,the interest is calculated based on the:

Accepted Answer

A)  future value of installments. 
B)  average outstanding balance. 
C)  actual balance of the loan. 
D)  present value of all finance charges. 
E)  none of these 
A)  future value of installments. 
B)  average outstanding balance. 
C)  actual balance of the loan. 
D)  present value of all finance charges. 
E)  none of these

Question 3

Credit unions dominate the consumer loan market.

Accepted Answer

A) True 
 B)False

Question 4

Rebates are almost always more cost effective than the 0percent APR loan offered on automobile loans.

Accepted Answer

A) True 
 B)False

Question 5

When comparing two installment loans with the same principal and APR,the loan with the shorter maturity will have the lower monthly payment and the lower total costs.

Accepted Answer

A) True 
 B)False

Question 6

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.
-Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 7

A legal claim that allows creditors to liquidate loan collateral is a:

Accepted Answer

A)  loan. 
B)  note. 
C)  security claim. 
D)  lien. 
E)  none of these 
A)  loan. 
B)  note. 
C)  security claim. 
D)  lien. 
E)  none of these

Question 8

The purchase of credit life insurance is highly recommended by most financial planning experts.

Accepted Answer

A) True 
 B)False

Question 9

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

Accepted Answer

A) True 
 B)False

Question 10

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 | Installment loan] is used in situations where the funds to be used for repayment are known to be forthcoming.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 11

GMAC is an example of a captive finance company.

Accepted Answer

A) True 
 B)False

Question 12

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

Accepted Answer

A) True 
 B)False

Question 13

A personal,unsecured consumer loan is most frequently used to help borrowers straighten out a critical financial situation.

Accepted Answer

A) True 
 B)False

Question 14

Home equity loans are similar to other installment loans except:

Accepted Answer

A)  interest rates are generally higher. 
B)  the interest paid is generally tax deductible. 
C)  no home equity is required. 
D)  they are typically unsecured debts. 
E)  a and c 
A)  interest rates are generally higher. 
B)  the interest paid is generally tax deductible. 
C)  no home equity is required. 
D)  they are typically unsecured debts. 
E)  a and c

Question 15

Annual percentage rate is equivalent to:

Accepted Answer

A)  dollar cost of credit method. 
B)  discount method. 
C)  average loan balance method. 
D)  add-on method. 
E)  simple interest method. 
A)  dollar cost of credit method. 
B)  discount method. 
C)  average loan balance method. 
D)  add-on method. 
E)  simple interest method.

Question 16

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.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 17

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.
-Using [simple | add-on] interest would be less expensive for the borrower when determining the total to be paid to the lender.

Accepted Answer

The answer of Choose the word or phrase in [...

Question 18

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

Accepted Answer

A) True 
 B)False

Question 19

The highest interest rate installment loans are usually made by:

Accepted Answer

A)  consumer finance companies. 
B)  commercial banks. 
C)  credit unions. 
D)  savings and loan associations. 
E)  life insurance companies. 
A)  consumer finance companies. 
B)  commercial banks. 
C)  credit unions. 
D)  savings and loan associations. 
E)  life insurance companies.

Question 20

To qualify for a Perkins loan,you must:

Accepted Answer

A)  demonstrate financial need. 
B)  visit the financial institution. 
C)  apply through your parents. 
D)  all of the above 
E)  a and c only 
A)  demonstrate financial need. 
B)  visit the financial institution. 
C)  apply through your parents. 
D)  all of the above 
E)  a and c only

Installment loans are repaid in monthly payments.

When the simple interest method is used to determine finance charges,the interest is calculated based on the:

Credit unions dominate the consumer loan market.

Rebates are almost always more cost effective than the 0percent APR loan offered on automobile loans.

When comparing two installment loans with the same principal and APR,the loan with the shorter maturity will have the lower monthly payment and the lower total costs.

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. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

A legal claim that allows creditors to liquidate loan collateral is a:

The purchase of credit life insurance is highly recommended by most financial planning experts.

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

GMAC is an example of a captive finance company.

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

A personal,unsecured consumer loan is most frequently used to help borrowers straighten out a critical financial situation.

Home equity loans are similar to other installment loans except:

Annual percentage rate is equivalent to:

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.

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

The highest interest rate installment loans are usually made by:

To qualify for a Perkins loan,you must:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters

Exam 7: Using Consumer Loans

Installment loans are repaid in monthly payments.

When the simple interest method is used to determine finance charges,the interest is calculated based on the:

Credit unions dominate the consumer loan market.

Rebates are almost always more cost effective than the 0percent APR loan offered on automobile loans.

When comparing two installment loans with the same principal and APR,the loan with the shorter maturity will have the lower monthly payment and the lower total costs.

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. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

A legal claim that allows creditors to liquidate loan collateral is a:

The purchase of credit life insurance is highly recommended by most financial planning experts.

When comparing two installment loans with the same principal and APR,the loan with the longer maturity will have the lower monthly payment and the higher total costs.

GMAC is an example of a captive finance company.

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

A personal,unsecured consumer loan is most frequently used to help borrowers straighten out a critical financial situation.

Home equity loans are similar to other installment loans except:

Annual percentage rate is equivalent to:

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.

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

The highest interest rate installment loans are usually made by:

To qualify for a Perkins loan,you must:

Understanding the Financial Planning Process

Using Financial Statements and Budgets

Preparing Your Taxes

Managing Your Cash and Savings

Making Automobile and Housing Decisions

Using Credit

Insuring Your Life

Insuring Your Health

Protecting Your Property

Investment Planning

Investing in Stocks and Bonds

Investing in Mutual Funds

Planning for Retirement

Preserving Your Estate

Filters