HECOL Chap 6

When should you avoid using credit?

• When you need a product immediately

• When you can afford to pay cash

• When you want to build credit history

• When you have a low interest rate

What does 'm' represent in the EAR formula?

• Number of years

• Number of compounding periods per year

• Monthly interest rate

• Total loan amount

What is a trade-off of choosing a longer loan term?

• Higher monthly payments

• Lower interest rates

• Lower monthly payments but more interest

• No interest charges

What is one factor that affects the Effective Annual Interest Rate?

• Loan amount

• Frequency of compounding

• Borrower's credit score

• Loan term

What is the maximum loan amount defined for payday loans under the consumer protection act?

• $1,000

• $1,500

• $2,000

• $2,500

During what hours can collectors call you at home?

• 7 AM to 8 PM

• 8 AM to 9 PM

• 9 AM to 10 PM

• 10 AM to 11 PM

What is one thing collectors cannot do regarding your debt?

• Discuss with your employer

• Discuss with your spouse

• Discuss with anyone except you or your representative

• Discuss with your friends

What is one thing collectors cannot give when contacting you?

• Accurate information

• False or misleading information

• Helpful advice

• Payment options

Which step is NOT part of the Debt Management 3-Step?

• Plan to reduce the number of debts

• Renegotiate to reduce interest charges

• Consolidate to maximize your results

• Increase your credit limit

What is a potential issue if your payment history shows defaults?

• You may not qualify for a consolidation

• You will get a lower interest rate

• You will have more credit options

• You can easily get a new loan