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Exam 7: Using Consumer Loans

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Question 41

True/False

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About one in four student loans are past due.

A) True
B) False

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Question 42

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Consolidation loans are often used to help borrowers straighten out a critical financial situation.

A) True
B) False

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Question 43

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The best loan rates for consumer loans are from consumer finance companies.

The average undergraduate student loan for students graduating in 2014 is estimated to be over:

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. -There are now about [$1 billion | $1 trillion] in student loans outstanding.

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

Jamie is going to buy some furniture with a single-payment loan that is discounted.The loan will be for $5,000 for 2 years at 10% interest.Calculate the APR 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 longer the loan maturity,the [lower | higher] the monthly payments will be.

You want to borrow $1,000 at an interest rate of 10%.The most expensive method of calculating the dollar cost of the interest on this installment loan will be the:

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. -Borrowers are more likely to ask for a(n) [single payment | installment payment] consumer 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 majority of single-payment loans [are | are not] secured by collateral.

When the market interest rate goes up,the rate on variable rate loans goes up.

Both single-payment and installment loans can have variable interest rates.

A _____ is often a source of automobile financing on specific models of vehicles.

Consumer loans are most commonly used to obtain durable goods.

Single-payment loans are used mostly for short-term financing.

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. -Your budget should be considered [before | after] taking on a large consumer loan.

Consumers whose debt burden has become very heavy might apply for a(n) :

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

Regarding student loans,which of the following is true?