Study your flashcards anywhere!

Download the official Cram app for free >

  • Shuffle
    Toggle On
    Toggle Off
  • Alphabetize
    Toggle On
    Toggle Off
  • Front First
    Toggle On
    Toggle Off
  • Both Sides
    Toggle On
    Toggle Off
  • Read
    Toggle On
    Toggle Off
Reading...
Front

How to study your flashcards.

Right/Left arrow keys: Navigate between flashcards.right arrow keyleft arrow key

Up/Down arrow keys: Flip the card between the front and back.down keyup key

H key: Show hint (3rd side).h key

A key: Read text to speech.a key

image

Play button

image

Play button

image

Progress

1/25

Click to flip

25 Cards in this Set

  • Front
  • Back
The item of value that backs a secured loan is called
collateral
The process of reviewing a loan for soundness is called
underwriting
This right allows a consumer to change his or her mind about a loan until midnight of the third business day following the signing of papers.
rescission
These are records of all who have requested a copy of a credit report within the last year.
Inquiries
A legal claim a lender has on property to secure a debt is called
a lien
Personal loans do not require that a specific purpose be stated.
True
Secured loans are sometimes called signature loans.
False
The amount a borrower pays to use the principal of a loan is called a fee.
False
A baloon payment is a single large payment due at the end of a loan.
True
Subprime rates are higher-than-normal interest rates offered to a less-than-perfect credit applicant.
True
If a credit applicant has opened many new accounts recently, that is probably a sign that the applicant is very creditworthy.
Fasle
Paying off a loan early saves the consumer no money if the sum-of-digits method has been used to figure finance charges.
True
One consequence of credit overextension is a ruined credit rating.
True
High consumer debt is good for banks, because banks make most of their money from the interest paid on loans.
False
The Truth in Lending Act prohibits bill collectors from using deceptive or abusive tactics.
False
Which of the following statements is NOT true?
Credit bureaus may not report information more than one year old.
Documentation of most credit problems stays in a consumer's file for at least
seven years
Which of the following attempts to protect the information that credit bureaus may collect?
Fair Credit Reporting Act
This finance charge method takes the total finance charge, divides it by the number of months in the loan term, and assigns a higher ratio of interest to the early payments.
sum-of-digits method
Which of the following elements of the FICO credit-scoring system carries the mst weight?
payment history
Which of the following shows the steps of the credit-approval process in proper order?
application, documentatio, processing, underwriting, closing, funding
Which of the following statements about open-end loans is true?
The longer you use the money, the more you pay.
Which of the following interest rates is linked to some other rate?
indexed rate
All of the following are considered installment loans except
lines of credit
A home equity loan is essentially a second
mortgage