test 2 fmgt

can be single payment loan or installment loan

• loan that is paid back in single lump sum payment at maturity
• also called single payment loan

short term laon that provides finding until longer term source can be secured or until additional fiancing is found

repayment of both interest & principal at regular intervals, with payment levels set so loan expires at a preset date

loan that is guaranteed by a specific asset

loan that's not guaranteed by a specific asset

repayment of loan using equal montly payments that cover portion of principal & interest on the declining balance - amount going to interest starts high and steadily declines while principal starts off low and stadily increases

interest rate banks charge to their most creditworhty or prime customers

That the rate you are paying is going to be more than the rate being offered currently

That you stay at the same rate, do not have to worry about payments going up or down and that you can keep a low rate if the rates go up

That the rate swings up and down and you end up paying a much higher rate than you can afford

That the rate may go down and pay a set amoung

a variable rate lan that can be converted into a fixed rate loan at borrower's option at specified dates in the future

agreement that identifies whether the lenderor borrower retains control over the item being purchased

failure of a borrower to make a scheduled interest or principal payment

formal document that outlines the legal obligations of both the lender and the borrower

• APR = interest charge/principal
• gives one year if less % * (360/# of days)