Question 1

Which student loan does not accrue interest during school?

Accepted Answer

A)  Parent Plus.
B)  Unsubsidized.
C)  Subsidized.
D)  No student loans accrue interest during school.E) A) and B)
F) All of the above

Question 2

Why can't lenders make interest rates as high as they want?

Accepted Answer

A)  Usury laws
B)  Rollover
C)  Predatory lending
D)  Fair Trading ActE) All of the above
F) B) and C)

Question 3

Title loan lenders are required to show you their interest rates in annual percentages which can approach 300% depending upon the state.

Accepted Answer

A) True 
 B)False

Question 4

If you pay off a $3,600 loan in 12 equal payments over 1 year at 1% monthly simple interest,how much will your payments be each month?

Accepted Answer

A)  $291.67
B)  $319.86
C)  $318.43
D)  None of the options are correct.E) A) and C)
F) All of the above

Question 5

According to the Federal Reserve Bank,in 2014,the average household credit card debt was ________.

Accepted Answer

A)  $15,622
B)  $5,765
C)  $12,876
D)  $20,143E) A) and B)
F) B) and D)

Question 6

Interest rates on credit cards are

Accepted Answer

A)  fixed.
B)  variable.
C)  fixed and/or variable.
D)  none of the options are correct.E) A) and C)
F) A) and D)

Question 7

Which is not referred to as predatory lending?

Accepted Answer

A)  Payday loans
B)  Check advance loans
C)  Margin loans
D)  Deferred deposit loansE) A) and D)
F) B) and C)

Question 8

Which is not part of the 5 Cs of the credit decision?

Accepted Answer

A)  Character
B)  Capacity
C)  Conditions
D)  ContactsE) All of the above
F) C) and D)

Question 9

Which type of costly loan offers cash for holding the title of a car as collateral?

Accepted Answer

A)  Title loan
B)  Payday loan
C)  Car loan
D)  Rent-to-own loanE) A) and B)
F) C) and D)

Question 10

You used your clothing store credit card this month and your bill arrived in the mail 12 days ago.If you pay your bill today,this is referred to as a(n)

Accepted Answer

A)  credit report.
B)  grace period.
C)  interest charge.
D)  minimum charge.E) None of the above
F) A) and D)

Question 11

If you have a subsidized loan,what is the best time to start repaying it?

Accepted Answer

A)  After graduating
B)  During school
C)  Right after you get the loan
D)  After you start graduate schoolE) B) and D)
F) None of the above

Question 12

What is an alternative to being taken advantage of through predatory lending?

Accepted Answer

A)  Ask your bank for a personal loan
B)  Obtain a cash advance on your credit card
C)  Ask your employer for your check in advance
D)  All of the options are correct.E) A) and D)
F) C) and D)

Question 13

The majority of Payday Loans and Title Loans are for a one time emergency situation.

Accepted Answer

A) True 
 B)False

Question 14

What is the difference between federal subsidized and unsubsidized loans?

Accepted Answer

A)  Subsidized loans do not require repayment until 12 months after graduation,whereas unsubsidized loans require repayment immediately upon graduation.
B)  With a subsidized loan,the interest on the loan is paid by the government if the student is enrolled in school at half-time status or greater; an unsubsidized loan requires the student to pay the interest on the loan that has accrued while still in school.
C)  An unsubsidized loan allows students to borrow a greater amount of money than subsidized loans.
D)  All of the options are correct.E) A) and B)
F) A) and D)

Question 15

Which student loans typically have the lowest interest rate?

Accepted Answer

A)  Federal student loans to students
B)  Federal student loans to parents
C)  Private student loans
D)  All of the options typically have the same interest rates.E) None of the above
F) B) and D)

Question 16

One benefit of an unsubsidized loan,guaranteed by the U.S.Department of Education,is that the loan interest is paid for you while you are in school and maintain a minimum of a half-time status or greater.

Accepted Answer

A) True 
 B)False

Question 17

What are the 5 Cs of the credit decision?

Accepted Answer

A)  Contacts,conditions,collateral,co-signer,and capacity
B)  Character,capacity,collateral,capital,and conditions
C)  Cost,contacts,conditions,collateral,and capital
D)  None of the options are correct.E) B) and C)
F) All of the above

Question 18

If your credit limit is $2,500 and you charge $1,500 and pay back $700,what is the maximum amount you can charge?

Accepted Answer

A)  $500
B)  $700
C)  $1,500
D)  $1,700E) A) and B)
F) All of the above

Question 19

Calculate the cost per month to pay off a $1,000.00 personal loan over 2 years at 12% annual interest?

Accepted Answer

A)  $52.86
B)  $48.06
C)  $56.09
D)  $47.07E) B) and C)
F) A) and D)

Question 20

Which of the following credit card fees is charged once a year just for having a card?

Accepted Answer

A)  Cash advance fee
B)  Return item fee
C)  Annual fee
D)  Balance transfer feeE) B) and C)
F) A) and D)

Exam 5: Consumer Credit: Credit Cards and Student Loans

Which student loans typically have the lowest interest rate?

Correct AnswerverifiedShow Answer

Which type of costly loan offers cash for holding the title of a car as collateral?

Correct AnswerverifiedShow Answer

Title loan lenders are required to show you their interest rates in annual percentages which can approach 300% depending upon the state.

Correct AnswerverifiedShow Answer

One benefit of an unsubsidized loan,guaranteed by the U.S.Department of Education,is that the loan interest is paid for you while you are in school and maintain a minimum of a half-time status or greater.

Correct AnswerverifiedShow Answer

Why can't lenders make interest rates as high as they want?

Correct AnswerverifiedShow Answer

Which is not referred to as predatory lending?

Correct AnswerverifiedShow Answer

Which of the following credit card fees is charged once a year just for having a card?

Correct AnswerverifiedShow Answer

If your credit limit is $2,500 and you charge $1,500 and pay back $700,what is the maximum amount you can charge?

Correct AnswerverifiedShow Answer

Interest rates on credit cards are

Correct AnswerverifiedShow Answer

What are the 5 Cs of the credit decision?

Correct AnswerverifiedShow Answer

If you pay off a $3,600 loan in 12 equal payments over 1 year at 1% monthly simple interest,how much will your payments be each month?

Correct AnswerverifiedShow Answer

Which student loan does not accrue interest during school?

Correct AnswerverifiedShow Answer

What is the difference between federal subsidized and unsubsidized loans?

Correct AnswerverifiedShow Answer

Calculate the cost per month to pay off a $1,000.00 personal loan over 2 years at 12% annual interest?

Correct AnswerverifiedShow Answer

What is an alternative to being taken advantage of through predatory lending?

Correct AnswerverifiedShow Answer

Which is not part of the 5 Cs of the credit decision?

Correct AnswerverifiedShow Answer

If you have a subsidized loan,what is the best time to start repaying it?

Correct AnswerverifiedShow Answer

The majority of Payday Loans and Title Loans are for a one time emergency situation.

Correct AnswerverifiedShow Answer

According to the Federal Reserve Bank,in 2014,the average household credit card debt was ________.

Correct AnswerverifiedShow Answer

You used your clothing store credit card this month and your bill arrived in the mail 12 days ago.If you pay your bill today,this is referred to as a(n)

Correct AnswerverifiedShow Answer

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