Loan Terminology
What is is called when you spread payments out over s set amount of time?
Amortization
What is the guideline for how much student loan debt is the "okay" amount?
Total loans are less than your starting 1st year's annual income.
What limit should you use of your credit card? (percentage)
30%
Explain the difference of a new car vs. an old car vs. a leased car.
new car - never been owned before
used car - has at least 1 previous owner
leased car - rented from dealerships
What is the best for long term vs. short term? Buying or renting?
Buying is best for long-term. Renting is best for short-term.
The fee you pay for borrowing money is called . . .
interest
Describe the difference between unsubsidized loans and subsidized loans. What is the better option?
Unsubsidized means the interest that accrues when you are in college is your responsibility and subsidized loans means the government pays your interest while you're in school. Subsidized is the best option.
What are two things you should do to use your credit card "wisely"?
Pay off the whole balance each month and use it for small, routine purchases each month.
I am buying a car for $15,000. My down payment is $3,000. My loan is for 3 years. If I increased my down payment from 3,000 to 5,000 what would happen? (list two things)
My monthly payments would decrease.
The total cost of my loan would be less.
I will pay less in interest.
If I make $1,000 a month, what is the maximum amount I should spend on housing for the month?
$250
The large amount of money you pay before you take out a loan is called . . .
Down payment
How long is the grace period after you graduate? What does it mean?
Using the credit card statement Mrs. Kuta gives you, please answer the question:
What is the current total balance on this credit card?
$2,463.98
My car monthly payment should be what percent of my monthly budget?
<15%
Lease
I bought a car for $10,000. I took out a loan for $8,000 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, what term does the $8,000 represent?
Principal
What is FAFSA?
Helps people pay for college and gives awards such as work study programs, grants and loan options.
Using the credit card statement Mrs. Kuta gives you, please answer the question:
To use our credit card wisely, what should I pay off this month?
Complete balance - $2,463.98
If I make $60,000 per year, what is the maximum amount of money I should spend on a car?
$30,000
Which mortgage option will provide me with the largest monthly payment, but save me the most in interest over time?
15 year fixed rate mortgage
Which loan option is the BEST option? Why?
Option 1: 6.2% interest, 5 year term.
Option 2: 6.2% interest, 4 year term.
Option 3: 6.5% interest, 5 year term.
Please put the following in the correct order in which you should take out aid for college.
- sub/unsubsidized loans
- parent plus loans
- grants/scholarships
- private loans
1st - Grants/Scholarships
2nd - Sub/Unsubsidized loans
3rd - Parent plus loans
4th - Private loans
Using the credit card statement Mrs. Kuta gives you, please answer the question:
What is the credit card limit on this credit card?
$20,000
What is the difference between appreciation and depreciation?
Depreciation means it goes down in value over time. Appreciation means it goes up in value over time.