Question 1

College costs have been escalating,but not as rapidly as the overall rate of inflation.

Accepted Answer

A) True 
 B)False

Question 2

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

Accepted Answer

A) True 
 B)False

Question 3

The repayment period on most installment loans is six to twelve months.

Accepted Answer

A) True 
 B)False

Question 4

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

Accepted Answer

A) True 
 B)False

Question 7

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

Accepted Answer

A) True 
 B)False

Question 8

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

Accepted Answer

A)  Do it in a business-like fashion. 
B)  Charge interest if the loan is not to be quickly repaid. 
C)  Be sure both parties understand it is a loan, not a gift. 
D)  Lend only money you can afford to give away. 
E)  All of the above 
A)  Do it in a business-like fashion. 
B)  Charge interest if the loan is not to be quickly repaid. 
C)  Be sure both parties understand it is a loan, not a gift. 
D)  Lend only money you can afford to give away. 
E)  All of the above

Question 9

The student loans with the best loan terms are the Stafford and the Perkins loans.

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

Accepted Answer

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

Question 11

A single payment loan

Accepted Answer

A)  is generally unsecured by collateral. 
B)  usually matures in one year or less. 
C)  usually matures in five to seven years. 
D)  is generally used to finance auto purchases. 
E)  is provided by sales finance companies. 
A)  is generally unsecured by collateral. 
B)  usually matures in one year or less. 
C)  usually matures in five to seven years. 
D)  is generally used to finance auto purchases. 
E)  is provided by sales finance companies.

Question 12

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 13

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.
-About [27% | 47%] of student loans are past due.

Accepted Answer

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

Question 14

In most cases,lenders will liquidate the collateral until the loan is paid.

Accepted Answer

A) True 
 B)False

Question 15

A characteristic of consumer loans is that they

Accepted Answer

A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these. 
A)  include a negotiated contract. 
B)  are arrived at through a formal process. 
C)  include a repayment schedule. 
D)  are used to purchase big-ticket durable goods and other items. 
E)  are all of these.

Question 16

PLUS loans are made to parents or legal guardians rather than to the student.

Accepted Answer

A) True 
 B)False

Question 17

Purchasing credit life or disability insurance protection is usually

Accepted Answer

A)  required in order to make the loan. 
B)  non-negotiable. 
C)  at the lender's option. 
D)  very costly. 
E)  a good idea for the borrower. 
A)  required in order to make the loan. 
B)  non-negotiable. 
C)  at the lender's option. 
D)  very costly. 
E)  a good idea for the borrower.

Question 18

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

Accepted Answer

A)  consumer 
B)  installment 
C)  automobile 
D)  mortgage 
E)  single payment 
A)  consumer 
B)  installment 
C)  automobile 
D)  mortgage 
E)  single payment

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.
-The Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

Accepted Answer

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

Question 20

The most accurate method currently available for calculating the annual percentage rate (APR)on an add-on loan is the Rule of 78.

Accepted Answer

A) True 
 B)False

College costs have been escalating,but not as rapidly as the overall rate of inflation.

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

The repayment period on most installment loans is six to twelve months.

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

The highest interest rate installment loans are usually made by

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

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

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

The student loans with the best loan terms are the Stafford and the Perkins loans.

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.

A single payment loan

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. -About [27% | 47%] of student loans are past due.

In most cases,lenders will liquidate the collateral until the loan is paid.

A characteristic of consumer loans is that they

PLUS loans are made to parents or legal guardians rather than to the student.

Purchasing credit life or disability insurance protection is usually

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

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 Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

The most accurate method currently available for calculating the annual percentage rate (APR)on an add-on loan is the Rule of 78.

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

College costs have been escalating,but not as rapidly as the overall rate of inflation.

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

The repayment period on most installment loans is six to twelve months.

Sales finance companies commonly purchase the retail installment contracts of businesses that sell big-ticket items such as automobiles,furniture,and appliances.

The highest interest rate installment loans are usually made by

Most loans made by consumer finance companies are for larger amounts and are made to low risk borrowers.

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

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

The student loans with the best loan terms are the Stafford and the Perkins loans.

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.

A single payment loan

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. -About [27% | 47%] of student loans are past due.

In most cases,lenders will liquidate the collateral until the loan is paid.

A characteristic of consumer loans is that they

PLUS loans are made to parents or legal guardians rather than to the student.

Purchasing credit life or disability insurance protection is usually

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

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 Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

The most accurate method currently available for calculating the annual percentage rate (APR)on an add-on loan is the Rule of 78.

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