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1. Characteristics and types of consumer loans Aa Aa Credit can be great to have. In some situations, having credit can even help you achieve some financial goals, but only as long as you management program. . Consumer loans can be part of your credit identify characteristics of a consumer loan in the following list. Check all that apply. Used for a one-time transaction for a specific purpose Has no specified repayment plan except periodically due minimum payments Has a formal, negotiated contract Can be used repeatedly as long as it is not canceled Used primarily to buy low-cost goods and services on an ongoing basis Is informally arranged Types of Consumer Loans

Types of Consumer Loans Identify each loan on the left by typing in the Answer column the letter of the description on the right that best fits it. Each loan has only one possible answer Loan Answer Description Used for nondurable expenditures and often granted based on a borrowers promise to repay the loan rather than using a specific asset as collateral to secure it Auto loans A. □ L Loans to students for undergraduate or graduate studies varied loan terms, depending on the type of asset purchased, such as home entertainment systems or boats Loans for other durable goods B. Education loans c. D. Available for a childs undergraduate college studies, up to Personal loans the full cost of attendance, with no specific dollar limit Consolidation loans E. Borrowing from one source to pay other creditors □ Loan for a car, truck, or minivan or an SUV Parent loans F.

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Answer #1

Question 1

Characteristics of the consumer loan:

  1. So option A is correct as it is used for specific purpose like buying a TV, Car , for education etc.
  2. Option B is incorrect as it does have repayment plan
  3. Option C is correct as it does have formal negotiated contract as it contains agreement regarding repayment, tenure and interest rate etc.
  4. Option D is correct as it can be used multiple times
  5. Option E is incorrect as it can be used to buy high value products like luxury cars etc.
  6. Option F is incorrect as these loans are formally agreed.

Question 2

  1. Auto Loan: Used to purchase automobiles like car, truck, minivan or any other vehicles

               So correct option is F

  1. Loans for other durable goods: These are the loans that are used for other durable goods like home entertainment etc.

So correct option is C

  1. Educational loan: Loan taken for higher studies like under graduation or graduation. These loans are provided on the basis of the course the student is taking.

So correct option is B

  1. Personal loan: Personal loans are those loans that are provided based on the need and generally there are no collateral for it. These are provided on the promise of the borrower.

So correct option is A

  1. Consolidation loan: This is a type of loan that is taken to repay the other creditors. Taking loan form one party and paying back the other party is consolidation loan

So correct option is E

  1. Parent loan: A parent can take loan for his/her child’s under graduation, this is known as parent loan

So correct option is D

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