Getting a Loan - The Homer Fund

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SELF-ASSESSMENT 81. What type of insurance protects you against the loss of income if you are unableto work a long time because of injury or illness?❏ a. health insurance❏ b. credit life insurance❏ c. disability insurance2. What type of automobile insurance coverage pays for damage done by your carto the property of others?❏ a. bodily injury liability coverage❏ b. property damage liability coverage❏ c. collision coverage3. What type of insurance reimburses you for damage or loss to your house andbelongings?❏ a. life insurance❏ b. disability insurance❏ c. homeowner’s insuranceHow did you do? 1.c 2.b 3.c30
Summary Points• Financial institutions are businesses that provide services such as checking accounts, savingsaccounts, and loans. Banks, savings and loans, credit unions, finance companies, and loan fundsare all types of financial institutions.• The Federal Deposit Insurance Corporation (FDIC) or National Credit Union Share Insurance Fund(NCUSIF) insure checking and savings accounts at government-regulated financial institutions for upto $100,000 per account.• All financial institutions make loan decisions based on an applicant’s ability to repay a loan.• The five C’s of credit include character (credit history), capacity (repayment sources, debt-to-incomeratio), capital (personal investment, alternate repayment sources), collateral (personal valuables toguarantee repayment), and conditions (situations that affect repayment).• Be honest and forthcoming on your loan application. Take the time to collect all of the necessaryinformation and discuss any questions you have with a representative at the financial institution orConsumer Credit Counseling Service (1-866-499-8771).• Throughout the life of a loan, a greater percentage of your monthly payments become principal andless is interest.• The higher the interest rate, the greater the cost of the credit.• The longer the term of the loan, the lower the monthly payment but the greater the cost of thecredit.• The higher the down payment, the lower the loan amount and the cost of the credit.• The higher the loan fees, the higher the cost of the credit.• Predatory lenders take advantage of inexperienced borrowers by directing them away fromaffordable loans.• Always research your loan options and discuss any questions with industry experts such asConsumer Credit Counseling Service (call toll-free at 1-866-499-8771).• Many lenders will require you to have insurance before they will make you a loan. Research yourinsurance options and discuss any questions with industry experts such as the National InsuranceConsumer Helpline at 1-800-942-4242.31
Page 13: Evaluating a Loan Application Exerc
Page 16 and 17: Study ObjectivesUnderline/highlight
Page 18 and 19: SELF-ASSESSMENT 41. To complete a l
Page 20 and 21: applicant is amassing credit from a
Page 22 and 23: Loan Rates, Terms, and FeesStudy Ob
Page 24 and 25: Payment Factor TableYou can calcula
Page 26 and 27: Personally Evaluating the Deal Exer
Page 28 and 29: Study ObjectivesUnderline/highlight
Page 30 and 31: InsuranceWhen you take out a loan t
Page 34 and 35: Knowledge Review32To review the con
Page 36 and 37: Juan is applying for a $1,000 loan
Page 38 and 39: Personally Evaluating the Deal Exer
Page 40 and 41: GlossaryAccount statement - This is
Page 42 and 43: Forgery - When a person purposefull
Page 44: 42Notes
Page 48: 4000 Wisconsin Avenue, NWNorth Towe

Getting a Loan - The Homer Fund

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