Exam 7: Using Consumer 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. -You must be a member of a [credit union | S&L] in order to borrow money there.

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 total finance costs will be.

If you needed a loan to buy furniture,the lowest interest rate would usually be available from a

If a 12-month installment loan is prepaid at the end of 6 months,one-half of the interest would be saved.

If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan,the amount to be repaid is $2,400.

Credit unions grant loans only to members of the credit union.

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.

Borrowing to pay for a college education is a legitimate use of credit.

Which of the following loan sources is the most expensive?

Student loans are dischargeable in Chapter 7 bankruptcy proceedings.

Commercial banks are generally more selective in granting loans than finance companies.

From a financial planning perspective when considering a consumer loan,you should ask yourself how the purchase fits into long-term financial plans.

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. -About [25% | 33%] of student loans are past due.

Annual percentage rate is equivalent 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. -It is [legal | illegal] for a lender to charge a prepayment penalty.

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

When you take out a loan against the cash value of your life insurance policy,you're really borrowing from yourself.

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. -Students borrowing to pay for college should base the amount borrowed on [current income | expected future salary].

If the discount method is used to calculate a finance charge of $250.60 on a $2,400 loan,the amount to be disbursed to the borrower is $2,400.