Overview of Loans

Which of the following loans will have a higher total cost?

A loan for $5,000 at 3.5 percent over a loan period of six years.

The difference between a secured loan and an unsecured loan is________.

A secured loan requires collateral ans an unsecured loan does not

Ramon took out a car loan with an interest rate of 10 percent and paid $100 in loan application fees. What term describes the amount of interest Ramon will pay?

APR

What are the 4 C's of lending?

Capacity, capital, character, and collateral

If the principal on one loan is $1,000 more than another loan, the total cost of the loan is $1,000 more. T/F

False

In one or two sentences, describe how a person can calculate his monthly payment for a loan.

Find an online loan calculator, use a spreadsheet, or a formula. It's necessary to enter the loan amount or principal, the term in years or months, the interest rate, and the start date into the text boxes and click "continue." At this point the calculator provides the amount of the monthly payment.

If you must apply find loan, you should _____.

Visit a loan officer at a financial institution and complete an application