Financing and Loans Review Game

Which of the following is the best example of a personal loan?

• Money borrowed when financing a new or used car and paid back in monthly payments.
• Your parents paying for your college tuition.  
• Taking money out of your savings account to buy something special for yourself with the intent on paying it back as soon as you can to your savings account.
• Asking a friend to borrow $5 for lunch next week.

Which of the following would you expect to be asked about on an application for a personal loan?

• Age
• weight
• employment status
• Current health status

What is the difference between down payment and loan principal?

• The down payment is money you pay at the time you buy something.  Loan principal refers to the initial amount of money you are borrowing to buy that something.
• The down payment is money you are required to pay at the time you buy something. Loan principal refers to the total you will end up paying for the thing you are buying.
• The down payment is money you are required to pay at the time you buy something. Loan principal refers to how much money you will pay in interest on the loan.
• The down payment is how much money you need to borrow in order to meet the price of something you want to buy.  The loan principal refers to the details of how the money will be paid back.  

Why do banks and some other financial institutions require some people to have a cosigner on their loan?

• Most banks want to loan out money but can require this if a person’s credit history, current job status or current savings are not sufficient to justify a loan.  
• The bank’s insurance companies force them to require this of their customers before giving a loan.
• The federal law requires all loans to have at least one consignor--no matter how much the loan was for.
• Cosigners are required for all loans over $10,000.

How is a loan contract different from the loan terms?

• A loan contract is an offer of a loan from a bank to a person whereas the loan terms refer to only the dollar amount and interest rate.  
• The loan term explains the credit history of the person applying for a loan and the contract is the agreement a person signs to pay back the loan.
• A loan contract is a legal document where someone agrees to the loan terms whereas the loan terms are just the details of the loan’s dollar amount, interest rate and the number of monthly payments.
• A loan term is just the amount of time a loan is active whereas the contract is the agreement on the interest rate.

Tags

CCSS.RI.7.3

CCSS.RI.8.3

CCSS.RI.8.5

CCSS.RI.9-10.3

CCSS.RI.9-10.5

Which of the following would you NOT find on a loan contract?

• Loan payment history for the person borrowing the money
• Repayment schedule of the loan
• Dollar amount of the loan
• Maturity date of the loan

What does the term Maturity Date of a loan refer to?

• The date of the last loan payment when the loan would be paid off.  
• The date of the first loan payment
• The date of a loan down payment
• The date the loan contract is agreed to

Which of these is the best financial reason for a person to choose an Adjustable Rate Mortgage over a Fixed Rate Mortgage?

• They want to live in that house for a very long time.
• They believe that interest rates will be going down in the near future.
• They are planning to retire in this house in 30 years with the mortgage totally paid off.  
• They want to make sure that they never have to pay more than their current mortgage amount.

Why do people buy renter’s insurance?

• It is required by law everywhere.
• Landlords never have any insurance on their rental properties.
• To avoid losing money if there is a fire or other event that ruins their personal belongings in a rental unit.  
• Renters always have valuable belongings.

The process for obtaining a personal loan starts with a

• contract
• down payment
• credit check
• application