Credit- Borrowing/Lending

Poll

Check-In:

How are you feeling today on a scale of 1-5

• 1

  Today's been the worst

• 2

  Bleh - Not good

• 3

  It's aight

• 4

  Not bad

• 5

  It's actually been a good day today

Poll

Daily Quote:

"Victory has a thousand fathers, but defeat is an orphan." -John F. Kennedy

This quote means:

• Everyone wants credit for the good but no one wants credit for the bad

• It's easier to be a bandwagon to success than a loyal supporter of someone struggling

• Avoid people who flee dealing with failure

• Other - I'd like to say what it means to me

Open Ended

Pick a quote about success you like from this link:

https://www.brainyquote.com/topics/success-quotes

Copy and Paste the quote into your response

Multiple Choice

What is credit?

• The ability to borrow money or access goods or services with the understanding that you will pay later

• Lenders and service providers grant money based on their confidence you can be trusted to pay back what you borrowed

• A score you are given based on your spending habits

• Something banks use to control your money

Multiple Select

People borrow money when ...

• They need to purchase a vehicle

• They need to purchase a home

• They want to open their own business

• When they don't have the cash amount for a large expenditure

• They want to buy fancy shoes

Interest

the amount of money owed for borrowing money

Example:
You want to buy a car that costs $5,000.
You borrow $5,000 from a bank to pay for the car.
The bank wants to charge you interest for borrowing money to pay for the car. The interest rate for borrowing $5,000 is 10%.
10% of $5,000 is $500.
That means, by the time you payoff the loan/borrowed money, you'll have paid the bank $5,500 instead of just the $5,000.
Why? Lenders want to make money for lending out money for consumers.

Multiple Choice

Interest can be defined as:

• a charge for lending money

• the amount owed for borrowing money

• the amount added into your savings account when opening a bank account

• a charge for convenience of accessing money in your bank

Multiple Choice

When you borrow money in the form of a loan or a credit card, you can end up paying more than the loan amount because you will pay ___ in addition to the loan amount.

• rate

• interest

• principal

• balance

Multiple Choice

Johnny takes out a $35,000 loan to purchase a recreational vehicle. He qualifies for a 4.5% interest rate, and his loan term is six years with a monthly payment of $555.59. How much interest will Johnny pay?

• $40,002.48

• $5,002.48

• $150.01

• $2675.42

Multiple Choice

Wiley borrowed $7,800.00 to help him start his lawncare business. He qualified for a 6% interest rate, and his loan has a three-year term with a monthly payment of $237.29. What will be the total amount Wiley pays for the loan?

• $8,542.44

• $742.44

• $16,848.00

• $5,298.76

Multiple Choice

Trinity is trying to select the best loan offer to pay for a new car. The cost of the car is $24,000.00. However, Trinity is going to make a down payment of $5,000. Which option has the lowest amount of interest owed?

• five-year loan at 4.5% with monthly payments of $354.22

• three-year loan at 5% with monthly payments of $569.45

• six-year loan at 4.8% with monthly payments of $304.23

• four-year loan at 6% with monthly payments of $446.22

Multiple Choice

Christopher buys a house for $225,000 for 6.3% interest for 30 years. His monthly payments are $1,392.69. How much will pay in total for this loan?

• $501,368.40

• $276,368.40

• $41,780.70

• $14,175.00

Lender's Considerations - "Credit"

lenders calculate the risk of lending money to consumers by considering:

• Verified identification, contact information, and address

• Employment status and income (yearly salary based on W-2 tax report)

• History of borrowing money from other lenders

• How long it took for the borrower to pay off previous loans

• All of this is info is calculated into a CREDIT REPORT

• Consider: The less money you make, the more debt you haven't paid off, the less likely you recieve the loan you want OR the higher the interest rates will be for borrowing money ="BAD CREDIT"

• Conversly, the more money you make, the less debt you owe, the more money you can borrow and interest rates will lower. = "GOOD CREDIT"

Categorize

Options (8)

Contact info is up-to-date

No phone # or email, currently homeless

Salary of $70,000+

Part time income of $12/hour

All previous loans paid-off

Behind on car payments

First loan taken out a couple weeks ago

First loan taken out 5 years ago

Organize these lender considerations that lead to Good Credit and Bad Credit borrows:

Good Credit

Bad Credit