FHCE 3200 Exam 2 UPDATED Exam
Questions and CORECT Answers
mainstream lenders - CORRECT ANSWER banks, credit unions, auto financing, credit cards.
heavily rely on credit report and score
alternative lenders - CORRECT ANSWER check cashers, payday lenders, title loans, pawn
shops, used car loans. don't rely on credit score when making a decision
payday loans - CORRECT ANSWER short term loan designed to be repaid within a few
weeks when borrower receives paycheck. write check when take out loan and company will cash
the check if not paid back in 2 weeks
avoiding expensive loans - CORRECT ANSWER have an emergency fund to withdraw $
from, borrow from family, get a loan from bank
truth in lending act - CORRECT ANSWER law that protects consumers who borrow money.
includes disclosure of terms and costs, right of rescission, advertising rules, enforcement, billing
statements, and high-cost mortgage protection
personal loan - CORRECT ANSWER a small-dollar debt used to pay bills or make purchases.
types include secured loan, unsecured loan, installment credit, line of credit, deposit advance,
and P2P lending
secured loans - CORRECT ANSWER personal loan backed by collateral that can be taken if
borrower fails to repay loan
unsecured loan - CORRECT ANSWER personal loan not backed by collateral. sometimes
called signature loans and are considered riskier so have high interest rate
, installment loan - CORRECT ANSWER personal loan where the borrower receives the full
amount of the loan upfront in a single lump sum. usually has a fixed interest rate and payback
period and repayment period is 1-5 yrs
personal line of credit - CORRECT ANSWER a personal loan that is similar to credit cards
allowing the borrower to maintain a revolving balance month to month. usually unsecured,
interest is only paid on money borrowed.
deposit advance - CORRECT ANSWER personal loan that is a short-term loan that is
automatically repaid when an electronic deposit is made. borrower must have a checking account
and a regular history of deposits of payments. borrower pays 10% when loan is needed and has
35 days to repay loan
Peer-to-Peer lending - CORRECT ANSWER a personal loan that allows borrower and lender
to come together on the internet. Must have a 650 credit score or higher
getting financial aid - CORRECT ANSWER apply with fafsa, receive award from school,
repay to lender
examples of financial aid awards - CORRECT ANSWER federal student loans, federal work-
study, and federal grants
federal student loans - CORRECT ANSWER direct subsidized loans
direct unsubsidized loans
direct PLUS loans
direct consolidation loans
direct subsidized loans - CORRECT ANSWER a federal student loan made to undergrad
students that demonstrate financial need. if students are enrolled in school more than half-time,
interest on loans is paid by the govt. these are the best value loans
Questions and CORECT Answers
mainstream lenders - CORRECT ANSWER banks, credit unions, auto financing, credit cards.
heavily rely on credit report and score
alternative lenders - CORRECT ANSWER check cashers, payday lenders, title loans, pawn
shops, used car loans. don't rely on credit score when making a decision
payday loans - CORRECT ANSWER short term loan designed to be repaid within a few
weeks when borrower receives paycheck. write check when take out loan and company will cash
the check if not paid back in 2 weeks
avoiding expensive loans - CORRECT ANSWER have an emergency fund to withdraw $
from, borrow from family, get a loan from bank
truth in lending act - CORRECT ANSWER law that protects consumers who borrow money.
includes disclosure of terms and costs, right of rescission, advertising rules, enforcement, billing
statements, and high-cost mortgage protection
personal loan - CORRECT ANSWER a small-dollar debt used to pay bills or make purchases.
types include secured loan, unsecured loan, installment credit, line of credit, deposit advance,
and P2P lending
secured loans - CORRECT ANSWER personal loan backed by collateral that can be taken if
borrower fails to repay loan
unsecured loan - CORRECT ANSWER personal loan not backed by collateral. sometimes
called signature loans and are considered riskier so have high interest rate
, installment loan - CORRECT ANSWER personal loan where the borrower receives the full
amount of the loan upfront in a single lump sum. usually has a fixed interest rate and payback
period and repayment period is 1-5 yrs
personal line of credit - CORRECT ANSWER a personal loan that is similar to credit cards
allowing the borrower to maintain a revolving balance month to month. usually unsecured,
interest is only paid on money borrowed.
deposit advance - CORRECT ANSWER personal loan that is a short-term loan that is
automatically repaid when an electronic deposit is made. borrower must have a checking account
and a regular history of deposits of payments. borrower pays 10% when loan is needed and has
35 days to repay loan
Peer-to-Peer lending - CORRECT ANSWER a personal loan that allows borrower and lender
to come together on the internet. Must have a 650 credit score or higher
getting financial aid - CORRECT ANSWER apply with fafsa, receive award from school,
repay to lender
examples of financial aid awards - CORRECT ANSWER federal student loans, federal work-
study, and federal grants
federal student loans - CORRECT ANSWER direct subsidized loans
direct unsubsidized loans
direct PLUS loans
direct consolidation loans
direct subsidized loans - CORRECT ANSWER a federal student loan made to undergrad
students that demonstrate financial need. if students are enrolled in school more than half-time,
interest on loans is paid by the govt. these are the best value loans
