Question 1

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

Accepted Answer

A) True 
 B)False  True

Question 2

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

Accepted Answer

A) True 
 B)False  True

Question 3

The lender can adjust the rate on variable-rate loans only on prespecified adjustment dates.

Accepted Answer

A) True 
 B)False  True

Question 4

Credit unions lend money to qualified people who are

Accepted Answer

A) employees. 
B) members. 
C) previous borrowers. 
D) policyholders. 
E) stockholders. 
A) employees. 
B) members. 
C) previous borrowers. 
D) policyholders. 
E) stockholders.

Question 5

Regarding student loans,which of the following is not true?

Accepted Answer

A) They are available for both undergraduate and graduate students. 
B) Applications can be filled out on the Internet. 
C) There is no limit on how much can be borrowed with each loan. 
D) There is no limit on the number of loans one can have. 
E) Interest may be tax deductible. 
A) They are available for both undergraduate and graduate students. 
B) Applications can be filled out on the Internet. 
C) There is no limit on how much can be borrowed with each loan. 
D) There is no limit on the number of loans one can have. 
E) Interest may be tax deductible.

Question 6

S&L associations are not allowed to make loans for things like cars,televisions,and appliances.

Accepted Answer

A) True 
 B)False

Question 7

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 interest paid on a student loan [is sometimes | is not] tax deductible.

Accepted Answer

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

Question 8

Simple interest on an installment loan is calculated as Amount of Loan × Interest Rate × Term of Loan.

Accepted Answer

A) True 
 B)False

Question 9

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

Accepted Answer

A) True 
 B)False

Question 10

If your installment loan has a variable interest rate,

Accepted Answer

A) the rate will remain the same over the life of the loan. 
B) the amount you borrowed will change with interest rates. 
C) you cannot accurately predict the total interest you will pay on the loan. 
D) you can calculate the total interest you will pay on the loan. 
E) none of these are true. 
A) the rate will remain the same over the life of the loan. 
B) the amount you borrowed will change with interest rates. 
C) you cannot accurately predict the total interest you will pay on the loan. 
D) you can calculate the total interest you will pay on the loan. 
E) none of these are true.

Question 11

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

Question 12

Sales finance companies

Accepted Answer

A) lend money to retailers. 
B) buy installment loans from retailers. 
C) sell installment loans to retailers. 
D) lend money to consumers. 
E) sell installment loans to banks. 
A) lend money to retailers. 
B) buy installment loans from retailers. 
C) sell installment loans to retailers. 
D) lend money to consumers. 
E) sell installment loans to banks.

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.
-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 14

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

Question 15

529 Plans are the newest type of student loans.

Accepted Answer

A) True 
 B)False

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 Rule of 78 loads an inordinate amount of interest charges to the [early | later] months of the loan.

Accepted Answer

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

Question 17

Life insurance loans could involve a tax penalty if certain conditions are not met.

Accepted Answer

A) True 
 B)False

Question 18

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.(Show all work.)

Accepted Answer

@#IMG-DLM& where:
M = number of payments

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

Single-payment loans are often used as a form of interim financing.

Accepted Answer

A) True 
 B)False

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

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

The lender can adjust the rate on variable-rate loans only on prespecified adjustment dates.

Credit unions lend money to qualified people who are

Regarding student loans,which of the following is not true?

S&L associations are not allowed to make loans for things like cars,televisions,and appliances.

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 interest paid on a student loan [is sometimes | is not] tax deductible.

Simple interest on an installment loan is calculated as Amount of Loan × Interest Rate × Term of Loan.

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

If your installment loan has a variable interest rate,

To qualify for a Perkins loan,you must

Sales finance companies

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.

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

529 Plans are the newest type of student 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 loads an inordinate amount of interest charges to the [early | later] months of the loan.

Life insurance loans could involve a tax penalty if certain conditions are not met.

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.(Show all work.)

The highest interest rate installment loans are usually made by

Single-payment loans are often used as a form of interim financing.

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

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

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

The lender can adjust the rate on variable-rate loans only on prespecified adjustment dates.

Credit unions lend money to qualified people who are

Regarding student loans,which of the following is not true?

S&L associations are not allowed to make loans for things like cars,televisions,and appliances.

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 interest paid on a student loan [is sometimes | is not] tax deductible.

Simple interest on an installment loan is calculated as Amount of Loan × Interest Rate × Term of Loan.

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

If your installment loan has a variable interest rate,

To qualify for a Perkins loan,you must

Sales finance companies

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.

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

529 Plans are the newest type of student 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 loads an inordinate amount of interest charges to the [early | later] months of the loan.

Life insurance loans could involve a tax penalty if certain conditions are not met.

Calculate the average percentage rate (APR)for an add-on loan with 36 monthly installments.The principal is $4,000; the stated interest rate is 6%.(Show all work.)

The highest interest rate installment loans are usually made by

Single-payment loans are often used as a form of interim financing.

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