Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

Accepted Answer

A)  add-on 
B)  sales 
C)  acceleration 
D)  garnishment 
E)  balloon 
A)  add-on 
B)  sales 
C)  acceleration 
D)  garnishment 
E)  balloon

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Consumer loans are most commonly used to obtain durable goods.

Accepted Answer

A) True 
 B)False

Question 5

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 6

Consumer loans,like open account credit,result from a rather informal process.

Accepted Answer

A) True 
 B)False

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

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 9

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 10

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Consolidation loans are generally [inexpensive | expensive].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 11

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

Accepted Answer

A) True 
 B)False

Question 12

INSTRUCTIONS: Choose the word or phrase in [ ] which 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.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 13

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-The best loan rates for consumer loans are usually from [savings and loan associations | consumer finance companies].

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 14

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 15

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

Accepted Answer

A) True 
 B)False

Question 16

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

Accepted Answer

A) True 
 B)False

Question 17

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. 
-Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

Accepted Answer

A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement. 
A) for the first item 
B) for the second item 
C) if neither item will correctly complete the statement.

Question 18

GMAC is an example of a captive sales finance company.

Accepted Answer

A) True 
 B)False

Question 19

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

Accepted Answer

Finance charge = $5,000 * .10

Question 20

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the

Accepted Answer

A)  add-on method. 
B)  double declining balance method. 
C)  discount method. 
D)  simple interest method. 
E)  past-due balance method. 
A)  add-on method. 
B)  double declining balance method. 
C)  discount method. 
D)  simple interest method. 
E)  past-due balance method.

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

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

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

Consumer loans are most commonly used to obtain durable goods.

Home equity loans are similar to other installment loans except

Consumer loans,like open account credit,result from a rather informal process.

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

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

The highest interest rate installment loans are usually made by

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Consolidation loans are generally [inexpensive | expensive].

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

INSTRUCTIONS: Choose the word or phrase in [ ] which 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.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The best loan rates for consumer loans are usually from [savings and loan associations | consumer finance companies].

Annual percentage rate is equivalent to

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

GMAC is an example of a captive sales finance company.

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the

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

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

A(n)____ clause gives the lender legal recourse in collecting the debt if the borrower does not pay.

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

Consumer loans are most commonly used to obtain durable goods.

Home equity loans are similar to other installment loans except

Consumer loans,like open account credit,result from a rather informal process.

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

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

The highest interest rate installment loans are usually made by

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Consolidation loans are generally [inexpensive | expensive].

The student loans with the lowest rates of interest and the best loan terms are the PLUS loans.

INSTRUCTIONS: Choose the word or phrase in [ ] which 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.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -The best loan rates for consumer loans are usually from [savings and loan associations | consumer finance companies].

Annual percentage rate is equivalent to

When simple interest is used,the stated rate of interest on single payment loans is equal to the annual percentage rate (APR).

The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home.

INSTRUCTIONS: Choose the word or phrase in [ ] which will correctly complete the statement. -Loan repayment of a [PLUS | Stafford] loan would begin a month after the loan is received.

GMAC is an example of a captive sales finance company.

Jamie is going to buy some furniture with a single payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR on this loan.

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the

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