FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Using Consumer Loans: The Role of Planned Borrowing

Show Answer

Share

---

All types

Filters

Study Flashcards

Question 41

True/False

Review LaterAdd Note

Review Later

Lenders tend to like to see borrowers put down large down payments for loans because this is seen as increasing the borrower's desire to pay off the loan since the borrower now has equity in the collateral.

Correct Answer

verified

Show Answer

Question 42

True/False

Review LaterAdd Note

Review Later

A balloon loan calls for repayment of both interest and principal at regular intervals, with the payment levels set so that the loan expires at a preset date.

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Which of the following statements regarding the risk-return relationship is most accurate?

You just bought a car and borrowed $15,000 for 5 years at 8% APR. Using the simple interest method; by the time you pay off this loan your total finance costs will be closest to which of the following?

Brenda found out that reputable lenders use the 28/36 rule when determining mortgage qualification. Brenda currently grosses $6,000 per month. From this she pays a $200 car payment; a personal loan of $100 and a student loan payment of $90. Based on this information, would Brenda qualify for a mortgage?

The finance charges for a loan may include

If you own a home with a market value of $175,000 and you have an outstanding balance on your mortgage of $60,000, your home equity is

An advantage that direct or subsidized student loans have over other types of loans is

In driving around town one day, you noticed most of the payday loan companies were located close to the college and the local military base and there were none out in the newer neighborhoods. Why do you think this is so?

An acceleration clause states that if you default on a secured loan, not only can the lender repossess whatever is secured, but if the sale of the asset does not cover what you owe, you can also be billed for the difference.

Why is the debt limit ratio and 28/36 rule more important to conservative lenders like Banks and Credit Unions and not so important for lenders like small Finance companies and Payday lenders?

A payday loan is a reasonable option if you need a luxury item like a big screen TV.

A Chapter 13 personal bankruptcy is characterized by all of the following except

The annual percentage rate is the simple percentage cost of all finance charges over the life of the loan on an annual basis.

Which of the following does not require you to have a good credit rating to issue you a loan?

Variable-rate loans tied to long-term rates expose you to more risk of rate changes than variable-rate loans tied to short-term rates.

A recourse clause defines whatever actions a lender can take to recover money from you in case you default on the loan.

Which of these are possible options for most people who cannot pay their bills?

Your brother, a banker, has just approved a loan for you, an add-on interest loan. You will borrow $2,000 for one year with a 12% annual interest rate. What is your monthly payment?

Describe in detail the characteristics of the direct subsidized and unsubsidized student loans from the Federal government.