Consumer Finance 7

With adjustable rate loans, the causes of changing interest rates are conditions such as what? (3) Unemployment, inflation, and status of the economy, lenders can change interest rates any time they want to, and the federal reserve banks manipulate them
T/F A secured loan may lead to repossession TRUE
What defines what actions a lender can take to recover money forms borrower in case of default The recourse clause
Paying legal repossession fees lenders must pay and the remainder of the loan balance is your potential liability from the deficiency payments clause if you default .
When you default on a car loan where the title is collateral what happens (3) you will lose the car have damaged credit history face liability under the deficiency payment clause
T/F Student loans appear on your credit report and effect your credit score TRUE
T/F You can avoid. Repaying federally subsidized loans by declaring bankruptcy FALSE
A loan that is paid back in a single lump sum is called a what a balloon loan
The APR is the true simple interest rate paid over of loan and provides a reasonable approximation for the true cost of borrowing .
T/F The advantage to the borrower with a variable rate loan over a fixed rate lanolin clues lower initial rates and payments than a fixed loan and making it easier to afford since your income will probably increase along with loan payments TRUE
T/F Amortization refers to the process in which a large proportion of the early payments of An installment loan goes to cover interest, and the later payments have a larger proportion going towards the payment principle FALSE
When it comes to ______ relationship higher credit scores are associated with lower APR risk-return
Many lenders hold Dave to a 28/36 rule in evaluating his application for a mortgage. What does the 36 mean? The 36 means debt payments including mortgage must be less than 36% of his gross monthly income
A chapter 13 personal bankruptcy is characterized by all of the following except creditors vote on restructuring debt payments.

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