Personal Finance Part I – Types of Loans
By pooling the funds of savers, money could be lent at reasonable rates to those who needed to borrow. Consumer loans refers to people borrowing money to make a wide range of secured and unsecured loans to consumers for consumable items from lending institution. Consumer loan does not include mortgage loans, that is typically used only for home purchases. In this article, we will discuss types of consumer loans.
1. Personal Line of Credit
a) Banks, trust companies and credit unions may offer their creditworthy customers a personal line of credit as a convenient substitute for personal loans.
b) A personal line of credit is a flexible way to use credit, because the financial institution makes funds available to a customer up to certain limit.
c) There are interest charges on a personal line of credit; the interest rate is prime rate + 1% and adjusted monthly.
2) Overdraft Protection
Overdraft protection, available at banks, trust companies, and credit unions, allows deposit accounts to become overdrawn to a certain limit, usually $1,000 the overdraft becomes a loan and is subject to interest rates charged on credit card loans.
3) Credit Card Cash Advances
a) People with a credit card issued by a financial institution has the option of obtaining a loan called a cash advance, without making a special application each time funds are needed.
b) Interest here is calculated daily and begins at once and interest rate is usually higher than a line of credit or a personal loan.
4) Demand Loan
Customers with a good credit rating may arrange for a demand loan by signing an agreement to repay the loan in full at a certain date, with interest due monthly and the lender has the right to recall a demand loan at any time.
5) Installment Loans
These usually have a set interest rate, a maturity date, a repayment schedule, and certain security requirements.
I hope this information will help. If you need more information of health advices or series of articles of the above subject at my home page at:
http://medicaladvisorjournals.blogspot.com
http://lifeanddisabitityinsuranceunderwriter.blogspot.com/
All rights reserved. Any reproducing of this article must have all the links intact.
Kyle J. Norton
Personal Finance………..?
1. Match the following words to its correct definition.
A. General and progressive increase in prices
B. Investment in which you are loaning money for a certain time period to the issuer
C. Individual retirement account in which a person can set aside after-tax income up to a specified amount each year, earnings are tax-free, and tax free withdrawals may be made after age 59 1/2
D. Distributions of profit a company pays you because you own stock in that corporation
E. Supplemental retirement system in the United States
F. Individual Retirement Account
G. The amount of money you make on an investment in relation to the amount of time your money is invested stated as an annual percentage
H. Quick and easy way to estimate how long it will take for you to double your money
I. Type of tax-qualified deferred compensation plan in which an employee can elect to have the employer contribute a portion of his or her cash wages to the plan on a pretax basis
J. Retirement plan for certain employees of public schools, employees of certain tax-exempt organizations and certain ministers
K. An exchange where security trading is conducted by professional stockbrokers
L. The age at which someone stops working permanently
M. Asset purchased for profit
N. An arrangement to provide income to people when they are no longer earning income
O. Collection of financial securities (stocks, bonds, cash) that is managed by a company or a person on behalf of many investors
Rule of 72
Dividend
Mutual Fund
Bond
Stock Market
Rate of Return
Inflation
Pension
Retirement
Social Security
IRA
Roth IRA
401K
403b
Investment2.
How do mutual funds reduce risk?
A) They invest in stocks
B) They provide investment diversification
C) They use an investment manager
D) None of the above
3. Your grandpa is 62 and asks you if he is eligible to collect Social Security. What do you tell him?
A) He could collect his full payment now.
B) He could have started collecting at age 59 1/2.
C) He can receive reduced payments now.
D) None of the above.
4. Which type of account is usually used when employees can have a matching contribution from their employer?
A) Roth IRA
B) Traditional IRA
C) 401k
D) 403b
5. In the future, you and your friends plan to receive Social Security after you retire. At what age can you currently plan to receive full benefits?
A) 59 1/2
B) 62
C) 65
D) 67
6. Which type of individual retirement account should you choose if you want your contributions to be tax deductible?
A) Roth IRA
B) Traditional IRA
C) 401k
D) 403b
7. When you reinvest dividends,
A) you will receive them by check
B) you will receive them by direct deposit
C) the dividends are deposited into a Certificate of Deposit
D) the dividends are used to buy more shares of stock
8. Bonds are known as
A) fixed income investments
B) equities
C) dividends
D) no load mutual funds
9. When you purchase stock in a corporation
A) you are loaning money to the corporation
B) you are technically becoming a part owner of that corporation
C) you do NOT earn the right to vote on the direction of the company
D) you have to own the stock for at least one year before you are allowed to sell it.
10. Which of the following is the oldest measure of the U.S. stock market and the most widely used indicator of stock market activity?
A) The NASDAQ
B) The S&P 500
C) The Dow Jones Industrial Average
D) The Russell 2000
11. The total value of the securities a mutual fund owns divided by the number of shares outstanding is known as the mutual fund’s
A) Face Value
B) Net Asset Value
C) Market Value
D) Yield
12. Mutual Funds called "load" funds charge a high flat fee whyou purchase the fund or sell the fund.
A) True
B) False
13. TD Ameritrade is an example of a full-service brokerage company.
A) True
B) False
14. Treasury bonds are considered to be more risky than owning stocks.
A) True
B) False
15. A Roth IRA is beneficial because your withdrawls are tax-free.
A) True
B) False
16. IRA stands for Important Retirement Assets
A) True
B) False
That’s a lot of questions. If you care to email me any particular ones you are having trouble with, I’d be glad to help you. Or, if you email me your answers, I’d be glad to check them over for you. Good luck.
References :
Good grief Kassie, you could have found the answers in the textbook by the time it took you to type out the question. Putting it into homework help might have been a better venue.
References :