Question

I’m delighted to inform you that you have been approved for a Homeowner Bill Consolidation Loan of up to $365,100 at our lowest fixed rate of 6.00% (6.184% APR). You can use this money for anything you like; to pay off your high-interest debt, pay for college or expenses, take a dream vacation, or whatever you want. There are no restrictions!

For an example, with the following debt consolidation, a typical homeowner would save $1,224.88 per month!!

Credit Card—Interest 21% with Balance of $12,000 for Monthly Payment of $448.62

Auto Loan—Interest 8% with Balance of $15,000 for Monthly Payment of $359.20

Student Loan—Interest 10% with Balance of $23,000 for Monthly Payment of $488.68

Home Mortgage—Interest 8% with Balance of $170,000 for Monthly Payment of $1247.40

TOTAL CURRENT DEBT—$220,000 for Monthly Payment of $2543.90

New Homeowner’s Bill Consolidation Loan—Interest 6% with Balance of $220,000 for Monthly Payment of $1319.09 for SAVINGS of $1224.88

First Month’s Savings = $1224.88

First Year’s Savings = $14,698.56

Potential 10-year Savings = $146,985.60

• Do you agree with the savings claims by the loan company?
• Explain any illogical claims made by the loan company.

Answer 1

ANSWER:

Part-a:

The reserve funds claims made by the credit organization depends on the supposition of different financing costs in addition to the due sum, which changes from individual to individual.

Further, the mortgage holder charge union credit is an anchored advance on the place of the candidate. Henceforth it builds the hazard (of losing house if there should be an occurrence of disappointment) and also the open door cost of some other usage of this property which isn't considered in this examination.

Part-b:

The utilization of the word run of the mill property holder would spare is extremely nonsensical. It has expected pending adjusts and loan fee aware of run of the mill mortgage holder.

Further, the credit sum endorsed under this is endless supply of other factors.It isn't ensured that the advance will cover all the pending obligations. In the event that the advance sum is < the high enthusiasm pending credits, at that point it will make another layer of advance and if the candidate does not have consistent income could wind up in an obligation trap