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Write the question and the answer

Write the question and the answer. 1. Daniel buys goods on credit or borrows money. Which term identifies Daniel?    A.  Creditor  B.  Debtor  C.  Loanee  D.  Secured Party  . 2. Stephen uses his home as security for a loan. Which term describes the use of his home in this transaction?   

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Write the question and the answer

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  1. Write the question and the answer 1. Daniel buys goods on credit or borrows money. Which term identifies Daniel?    • A. Creditor  • B. Debtor  • C. Loanee  • D. Secured Party  2. Stephen uses his home as security for a loan. Which term describes the use of his home in this transaction?    A. Collateral  • B. Credit  • C. Interest  • D. Surety 

  2. Criteria of Negotiability • How to compute interest using different methods

  3. Agenda • Warm up • Review Methods of Calculating Interest • Notes-Loan types and Loan Procedures • Research Credit Cards • Study your notes for objectives 6.02—Yesterday and Today’s notes

  4. Types of Loans and Procedures for Borrowing Money Unit C Basic Business Law Objective 6.02

  5. Types of Loans Secured Loan Creditors obtain an interest in something of value • Collateral – Property that is the subject of the loan • Cosigner – Helps protect a loan when a borrower’s credit rating is poor • Secured Party – Lender or seller who holds secured interest • Repossession – Property is returned because of non-payment

  6. Types of Loans Unsecured Creditors obtain no collateral for loan • No Collateral • Creditors make sure that debtor is reliable and able to pay back loan • Example (Credit Cards)

  7. Types of Loans Single Payment Loan Debtor pays off loan in one payment • Promissory Note - Written promise to repay with interest • Installment Loan - Paid in regular payments

  8. Types of Loan Regulations Truth in Lending Act Regulation Z • Actual cost of finance charge must be known • Annual percentage rate • Liable for $50 unauthorized credit card purchases made prior to notification

  9. Types of Loan Regulations Equal Credit Opportunity Act • Applying for credit • Granted only on the ability to repay • Evaluation of application • Cannot discriminate based on gender, age, ethnicity, or religion • Acceptance and rejection • Based on income, current debts, or poor credit record

  10. Procedures for Borrowing Money • Loan Application • Consideration • Reputation for paying bills • Source of regular income • Competency • Number of dependants • Use of loan and for how long

  11. Procedures for Borrowing Money • Rules • Cannot ask sex, race, national origin, or religion • Cannot refuse on basis of sex or marital status • Marital status may/may not be asked • Do not have to disclose income from alimony or child support unless relying on income • May not be prohibited from using given names (birth)

  12. Procedures for Borrowing Money • Interview • Reference and credit check • Request for credit • Inaccuracy of credit report • Acceptance/Rejection • Must inform client within 30 days • If denied, must provide, upon request, reasons for denial within 60 days • Cannot close account due to change in marital status, unless person unwilling/unable to pay

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