Question 1

Which source of consumer loans specializes in home mortgage lending?

Accepted Answer

A)  Commercial banks 
B)  Credit unions 
C)  Consumer finance companies 
D)  Savings and loan associations 
E)  None of the above 
A)  Commercial banks 
B)  Credit unions 
C)  Consumer finance companies 
D)  Savings and loan associations 
E)  None of the above D

Question 2

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

Accepted Answer

A)  savings and loan association 
B)  credit union 
C)  commercial bank 
D)  consumer finance company 
E)  captive finance company 
A)  savings and loan association 
B)  credit union 
C)  commercial bank 
D)  consumer finance company 
E)  captive finance company E

Question 3

Which of the following are recommended if you loan money to a friend or relative?

Accepted Answer

A)  Charge a market rate of interest. 
B)  Have a lawyer draft a loan contract. 
C)  Put the agreement in writing. 
D)  Make the loan due within one year or less. 
E)  All of the above 
A)  Charge a market rate of interest. 
B)  Have a lawyer draft a loan contract. 
C)  Put the agreement in writing. 
D)  Make the loan due within one year or less. 
E)  All of the above C

Question 4

Single payment loans are used mostly for short-term financing.

Accepted Answer

A) True 
 B)False

Question 5

A consumer loan probably would not be used to

Accepted Answer

A)  purchase an auto. 
B)  pay for college tuition. 
C)  consolidate several loans into one. 
D)  finance a special vacation. 
E)  buy back-to-school clothes. 
A)  purchase an auto. 
B)  pay for college tuition. 
C)  consolidate several loans into one. 
D)  finance a special vacation. 
E)  buy back-to-school clothes.

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

The average student loan in 2012 was

Accepted Answer

A)  $5,200 
B)  $10,600 
C)  $12,800 
D)  $18,400 
E)  $26,300 
A)  $5,200 
B)  $10,600 
C)  $12,800 
D)  $18,400 
E)  $26,300

Question 8

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

Accepted Answer

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

Question 9

Regarding student loans,which of the following is true?

Accepted Answer

A)  They are available only for undergraduate. 
B)  Parents (or legal guardians) must cosign. 
C)  There is a limit on how much can be borrowed. 
D)  There is a limit on the number of loans one can have. 
E)  Interest does not have to be repaid. 
A)  They are available only for undergraduate. 
B)  Parents (or legal guardians) must cosign. 
C)  There is a limit on how much can be borrowed. 
D)  There is a limit on the number of loans one can have. 
E)  Interest does not have to be repaid.

Question 10

The cash value of a whole life insurance policy can be used as a source of loan collateral.

Accepted Answer

A) True 
 B)False

Question 11

Generally,collateral for an installment loan may be seized and liquidated by the lender if the borrower has paid the loan in full.

Accepted Answer

A) True 
 B)False

Question 12

Collateral is an item of value used to secure the principal portion of a loan.

Accepted Answer

A) True 
 B)False

Question 13

When credit life or disability insurance protection is required as a condition of a loan,the cost

Accepted Answer

A)  must be added to the finance charge. 
B)  must be included in the APR calculation. 
C)  is generally very reasonable. 
D)  a and b 
E)  a, b, and c 
A)  must be added to the finance charge. 
B)  must be included in the APR calculation. 
C)  is generally very reasonable. 
D)  a and b 
E)  a, b, and c

Question 14

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 15

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

Accepted Answer

A)  let the payment become past due. 
B)  consolidate the loan. 
C)  convert the loan to installments. 
D)  negotiate a rollover 
E)  file bankruptcy 
A)  let the payment become past due. 
B)  consolidate the loan. 
C)  convert the loan to installments. 
D)  negotiate a rollover 
E)  file bankruptcy

Question 16

Which source of consumer loans often has the most favorable terms?

Accepted Answer

A)  Commercial banks 
B)  Credit unions 
C)  Consumer finance companies 
D)  Savings and loan associations 
E)  None of the above 
A)  Commercial banks 
B)  Credit unions 
C)  Consumer finance companies 
D)  Savings and loan associations 
E)  None of the above

Question 17

Before taking out students loans,all the following should be considered except

Accepted Answer

A)  grants 
B)  federal student aid 
C)  scholarships 
D)  personal resources 
E)  all of the above 
A)  grants 
B)  federal student aid 
C)  scholarships 
D)  personal resources 
E)  all of the above

Question 18

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.
-[Consumer finance companies | Credit unions] obtain funds from their shareholders and through open market borrowing.

Accepted Answer

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

Question 19

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.
-When interest rates are rising,you would prefer a [fixed-rate | variable-rate] loan.

Accepted Answer

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

Question 20

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

Accepted Answer

A) True 
 B)False

Which source of consumer loans specializes in home mortgage lending?

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

Which of the following are recommended if you loan money to a friend or relative?

Single payment loans are used mostly for short-term financing.

A consumer loan probably would not be used 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. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

The average student loan in 2012 was

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

Regarding student loans,which of the following is true?

The cash value of a whole life insurance policy can be used as a source of loan collateral.

Generally,collateral for an installment loan may be seized and liquidated by the lender if the borrower has paid the loan in full.

Collateral is an item of value used to secure the principal portion of a loan.

When credit life or disability insurance protection is required as a condition of a loan,the cost

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.

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

Which source of consumer loans often has the most favorable terms?

Before taking out students loans,all the following should be considered except

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. -When interest rates are rising,you would prefer a [fixed-rate | variable-rate] loan.

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

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

Which source of consumer loans specializes in home mortgage lending?

A ____ is often a source of low-rate automobile financing on specific models of vehicles.

Which of the following are recommended if you loan money to a friend or relative?

Single payment loans are used mostly for short-term financing.

A consumer loan probably would not be used 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. -Credit life insurance [is | is not] a good financial deal from the perspective of the borrower.

The average student loan in 2012 was

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 longer the loan maturity,the [lower | higher] the monthly payments will be.

Regarding student loans,which of the following is true?

The cash value of a whole life insurance policy can be used as a source of loan collateral.

Generally,collateral for an installment loan may be seized and liquidated by the lender if the borrower has paid the loan in full.

Collateral is an item of value used to secure the principal portion of a loan.

When credit life or disability insurance protection is required as a condition of a loan,the cost

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.

If you borrow money on a single payment loan and discover you cannot pay it back when it is due you should

Which source of consumer loans often has the most favorable terms?

Before taking out students loans,all the following should be considered except

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. -When interest rates are rising,you would prefer a [fixed-rate | variable-rate] loan.

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

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