5. General factors to consider when shopping for a consumer loan

Please answer all of parts of the question.

Factors to Consider Before Taking Out a Consumer Loan You've made the decision to purchase an item that is affordable only with a loan. When shopping for a loan, there are many aspects of the loans that you should examine. Which of the following questions should be asked and answered about a specific loan proposal before accepting a lender's offer? Check all that apply. Does the loan have a prepayment penalty? Is the loan collateralized? What is the total cost of transaction (cost of item purchased plus cost of loan)? Do you need, or only want, the item being purchased? Does the loan's payment date fit my budget? You're shopping for a big loan, but you have misgivings about Jacques, the loan officer, at an institution you just visited. What are some reasons that may have you uneasy about accepting a loan there? Check all that apply. Your parents may be able to help you with the down payment, but Jacques told you to assume they will and to enter a down payment on the application including their contribution. Jacques said that his loan was most likely the only one you'd be able to obtain. Jacques volunteered pertinent information that you didn't even know enough to ask about. When you filled out the loan application, Jacques told you to leave out the smaller amounts you owe to department stores. Jacques pointed out that the APR and interest rate were different. When you filled out the application, Jacques said if you weren't sure about something on it, you could take the application home and complete it when you had the correct answers. Jacques told you that the interest rate is the only important fee to worry about and that discussing the APR is an unnecessary complication. Jacques encouraged you to shop around. What are the characteristics of your reasons for feeling uneasy about Jacques the loan officer? check all that apply. The loan officer's embellishment of the facts The way the loan officer omitted pertinent information Feeling under pressure to make a decision Your friend suggested you look into a variable-rate loan. What questions should you ask? Check all that apply. How many points are added to the base rate? What changes after a rate adjustment-the monthly payment amount or the number of monthly payments left on the loan? How often is the rate subject to change? Is there a maximum rate? Given the long list of relevant loan-related considerations described above, the paradox of choice often arises when attempting to make borrowing decisions. Which of the following phrases addresses the characteristics and recommended solutions for this phenomenon? Check all that apply. Identify your goals and a framework for evaluating any trade-offs that must be made when making your decision Prepare a list of possible alternatives and make a random selection Arises when there are too many complicated choices, such you can become overwhelmed and make poor decisions Keep it simple and select the easiest or least expensive alternative