Ch.7

T/F The cash value of a life insurance policy can be used as a source of loan collateral. true
Credit unions lend money to qualified people who are members
T/F The most common use of consumer loans are to purchase automobiles. true
T/F When the market interest rate goes up, the rate on variable rate loans goes up. true
T/F Credit unions offer some of the most attractive loan terms available. true
T/F The primary type of loan made by a savings and loan association is the long-term installment loan used for the purchase of a home. true
T/F College costs have been escalating faster than the overall rate of inflation. false
T/F The average annual cost of a college education at a state school is about $33,000. false
T/F It is becoming increasingly frequent for longer-term installment loans to carry variable interest rates true
T/F Loans against a life insurance policy do not have to be paid back. true
T/F The lender can adjust the rate on variable-rate loans only on prespecified adjustment dates. true
Credit unions grant loans only to members of the credit union. true
The most popular use of consumer loans is to purchase a car
Even if you do have money, you may still be better off using an installment loan for a big-ticket purchase. true
Besides the finance charge, you should also consider ____ when you shop for a consumer loan. loan maturity, total cost of the loan, collateral, and repayment responsibilities
Which type of educational loan most likely carries the highest interest charges? PLUS loan
Student loans are dischargeable in Chapter 7 bankruptcy proceedings. false
If a loan has a prepayment penalty, there will be an additional cost to repay the loan early. true
The majority of loans made by savings and loan associations are ____ loans mortgage
About one in three student borrowers have a past due balance.
The average graduating college senior leaves school with about _______ in debt $30,000
Earnings on 529 college savings plans can be tax free when used for qualifying college education expenses. t
S&L associations are not allowed to make loans for things like cars, televisions, and appliances. f
Borrowing to pay for a college education is a legitimate use of credit. t

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