Exam 7: Using Consumer Loans

Jamil is purchasing a new truck for $30,000.Jamil is making a $2,000 down payment,and he will make 60 monthly payments of $541 each.What are the total finance charge on this 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. -The Rule of 78 is used to calculate [APR | balance due] when an installment loan is paid off early.

A loan from the cash value of your life insurance policy would be characterized by:

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

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 are borrowing $5,000 at 9%.You may choose a 24 or 36 month repayment plan.Monthly payments will be higher with the [24 | 36] month plan.

The student loans with the lowest rates of interest and the best loan terms are the PLUS 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. -Loans to relatives and friends should be in the form of [verbal | written] agreements.

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 average annual cost of a college education at a private college is about [$15,000|$42,000].

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

The annual percentage rate (APR)on a single-payment loan for $1,000 at a simple interest rate of 12% is:

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

Finance companies are more selective in granting loans than credit unions.

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.

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

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 falling,you would prefer a [fixed-rate | variable-rate] 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. -The interest paid on a student loan [is sometimes | is not] tax deductible.

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. -Almost half of all consumer loans are made by [commercial banks | finance companies].

If a loan has a prepayment penalty,there will be an additional cost to repay the loan early.

Savings and loan associations dominate the consumer loan market.