Debt & Loans Flashcard

Front

Spreading payments out over a set amount of time is called...

Back

Amortization

Front

The fee you pay for borrowing money is called...

Back

Interest rate

Front

The large amount of money you pay before you take out a loan is called...

Back

Down payment

Front

I bought a car for $7,000. I took out a loan for $5,000 and had a down payment of $2,000. The loan is a 3 year loan and my interest rate is 3.6%. In this example, the $5,000 represents...

Back

Principal

Front

Which loan option is the BEST option? Options: 6.2% interest, 5 year term; 6.2% interest, 4 year term; 6.5% interest, 5 year term.

Back

6.2% interest, 4 year term.

Front

True or false: The more cash you put down as a down payment, the higher your initial principle balance will be on the loan.

Back

False

Front

True or false: When taking out a loan, lower monthly payments means it will take me longer to pay off the loan. Higher monthly payments will help me pay off the loan faster.

Back

True

Front

What is the guideline for how much student loan debt is the "okay" amount?

Back

Total loans are less than starting 1st year's annual income

Front

True or False: A grace period is when you don't have to make payments on student loans. This occurs right after you graduate college.

Back

True

Front

How long is the grace period after you graduate?

Back

6 months