Exam 7: Using Consumer Loans

Consolidation loans are often used to help borrowers straighten out a critical financial situation.

Long-term financial goals often depend on borrowing funds.The type of loan that does not fulfill the long-term goal achievement is ____ loans.

The most common use of consumer loans are loans to purchase theater tickets.

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

Home equity loans are similar to other installment loans except

The most common use of consumer loans are to purchase automobiles.

INSTRUCTIONS: 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. -Borrowers are more likely to ask for a(n)[single payment | installment payment] consumer loan.

Earnings on 529 college savings plans can be tax free when used for qualifying college education expenses.

INSTRUCTIONS: 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. -Loans to relatives and friends should be [verbal | written] agreements.

Savings and loan associations are allowed to make loans for things like cars,boats,and motorcycles.

Consumer finance companies usually charge lower rates of interest than commercial banks.

With the discount method,the finance charges are calculated and then added to the amount borrowed.

INSTRUCTIONS: 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. -Almost half of all consumer loans are made by [commercial banks | finance companies].

Consumer loans are most commonly used to obtain durable goods.

The ____ in an installment purchase contract indicates whether or not the lender has control over the item being purchased.

INSTRUCTIONS: 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.

INSTRUCTIONS: 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.

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

The most popular use of consumer loans is to

INSTRUCTIONS: 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.