chapter 6 and 7

CHAPTER 6

A GOOD CREDIT RATING SETS WHEELS IN MOTION.

WHAT IS CREDIT?
credit is the most complex of the engines that drive the american economy.Credit is your reputation for financial responsibility. Credit is also the time allowed for payment for something sold on trust. Credit is a source of revenue for financial institutions. Credit is not more money; it is tomorrows money.

THE COST OF CREDIT
its helpful to think of credit as "renting" the use of someones else money for a period of time.

HOW TO SHOP FOR CREDIT
1. Finance change
2. Annual percentage Rate
3. Amount borrowed
4. Total amount repaid
5. Down payment
6. Payment
7. Term
8. Collateral

HOW TO APPLY FOR A LOAN
will you repay the loan?
are you able to repay the loan?
do you have roots in the community?

TYPE OF LOANS
personal loans
secured loans
unsecured loans
mortgage loans

CHAPTER 7

NOW YOU'RE THE LENDER

the fictitious financial institution's lending policy guidelines
1. The applicant's pervious financial activities
2. The applicant should have a good use
3. The borrower's length of residence
4. The borrower's employment history
5. The borrower's credit history
6. The borrower should have sufficient prior experience in borrowing and repaying money
7. The borrower should have collateral
8. The borrower must have the capacity to repay the loan