FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 7: Student and Consumer Loans: the Role of Planned Borrowing

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Essay

Review LaterAdd Note

Review Later

Explain why add-on installment loans are more expensive than simple interest loans.

Correct Answer

verified

The add-on method generally results in a...

View Answer

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

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

A) $57,500.
B) $97,750.
C) $115,000.
D) $235,000.

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

The finance charges for a loan may include

According to the Keown book,how do you finance your college education without mortgaging your future?

Many lenders use the 28/36 rule in evaluating mortgage applications.If your mortgage payment itself is 28% of your gross income,that means that the remainder of your monthly debt must be ________% or less.

You are headed to the mountains for some climbing this summer and you need some gear.The local mountaineering shop is offering 6% financing on all purchases before the end of the month.Your savings account is currently paying 5%,and you are in a marginal tax bracket of 28%.Which of the following is true?

Which statement is true regarding direct unsubsidized loans?

What is the distinguishing feature of an automobile loan?

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

A simple interest installment loan calculates interest on the unpaid balance.An add-on

What strategy should you use to obtain the lowest possible APR on a loan?

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

________ is when a borrower is allowed to temporarily stop making student loan payments for a qualified reason such as an illness,financial hardship,or serving in a medical or dental internship or residency.

A rule to determine what proportion of each loan payment is principal and interest is

What is the type of loan where the entire interest charge is subtracted from the loan principal before you receive the money,and at maturity you repay the entire principal?

Frank ran up a large credit card bill as an undergraduate student,he also took out as much in student loans as possible.He is now unable to pay his credit card debt and his student loan debt.However,he has decided to declare bankruptcy to eliminate his debt.Frank will be able to eliminate his federally subsidized student loan debt by declaring bankruptcy.

Consumer loans are less formal than credit cards and/or other open credit.

What is the name of the interest rate banks charge to their most creditworthy customers?

Ronald is borrowing $20,000 using the discount method.His bank is offering him an annual percentage rate of 8.5% and he is taking out the loan for 24 months.How large of a check will Ronald receive from this loan when he leaves the bank? How much will he repay?

Which of the following is the correct formula to calculate the after-tax cost of a home equity loan?