Loans Webquest

Use the websites indicated to answer the questions about car loans and student loans.
Car Loans
http://www.personalfinance.duke.edu/make-todays-decisions/transportation/what-are-ins-andouts-car-loans
1. How are car loans generally paid off?
- Car loans are generally paid off in monthly installments.
2. What other factors must be considered besides the monthly payment for your car loan when
determining if a car is affordable?
- Annual taxes and fees, fuel, insurance, maintenance, and repairs.
3. Define the following terms:
a. APR- annual percentage rate
b. Down Payment- the amount you put for the car upfront
c. Additional Finance Charges- additional fees for originating a loan that you may be charged
d. Loan Term- The length, or term, of a car loan, 36- to 60-month loans are recommended
e. Prepayment Penalty- a fee for paying off your loan early
4. How does your credit score affect your APR?

700+

Most favorable APRs (as low as 0-1% from dealers, as of 2012)

600-700

Reasonable APRs (a few percentage points)

Less than 600

You are a credit risk; expect a high APR (8%+)

5. What are 3 lenders you could finance your car through?

- car dealers, banks, and credit unions.
6. What does the dealer keep until the loan is paid off?
- the cars physical title until you pay off the loan
7. How can you make the process of paying off your car easier?
- Make it automatic
http://www.consumerreports.org/cro/2012/12/how-to-get-the-best-car-loan/index.htm
1. What should you focus on when comparing auto loans?
annual percentage rate (APR)
2. Explain the relationship between loan terms, monthly payments, and payments overall.
3. How much should a down-payment be?
4. What website should you use to search for car loan rates?
- http://www.bankrate.com/
5. Why are local banks in a position to offer competitive loan rates?

Banks generally have very specific, conservative loan policies and may only cater to those
with better credit references

6. Why are credit unions able to offer competitive loan rates?

They lend money only to their members, who are also owners of the credit union itself and they
are nonprofit.

Student Loans
http://www2.ed.gov/offices/OSFAP/DirectLoan/student.html
1. What are Direct Loans?

Low-interest loans for students and parents to help pay for the cost of a student's education
after high school.

2. What are 3 things you can do with Direct Loans?

Borrow directly from the federal government and have a single contactyour loan servicer
for everything related to repayment, even if you receive Direct Loans at different schools.
Have online access to your Direct Loan account information via your servicer's website.
Can choose from several repayment plans, and you can switch repayment plans if your needs
change.

3. How do you apply for Direct Loans?

- FAFSA on the web to complete their application
4. Define the following in your own words:
a. Subsidized Loan the student doesnt have to pay while in an in-school, grace, or
deferment period.
b. Unsubsidized Loan the opposite of a Subsidized Loan
c. PLUS Loan loans for eligible graduate or professional students and eligible parents of
dependent undergraduate students
d. Consolidation Loan when multiple overdue debts are put into one loan.
5. What are the current interest rates?
- 4.66%
6. What is the maximum amount you can borrow in your first year of college in a Direct Stafford
Loan?
- $5,500 ($3,500)3
7. While youre at school, what can you use Direct Loan money for?
- To pay for your tuition
8. Once you graduate, how long is the grace period in which you are not required to make loan
payments?
- 6 months
9. What is the name of the payment plan that most students repay their loans with?
- Direct subsidized or unsubsidized
10.What can you do if you have multiple federal education loans to make repayment easier?
- You can consolidate them into a single direct consolidation loan
11.How many years do you generally have to repay your student loans?
- 10-25 years
12.What does EDA stand for and how does it work?
- Electronic Debit account, automatically makes sure you have your payments made.
13.What are 3 options to choose from if youre having trouble making payments on your student
loans?
- Changing repayment plans
- Deferment
- Forbiddance
14.What are 2 consequences of going into default on your loans?
- We will require you to immediately repay the entire unpaid amount of your loan.

We may sue you, take all or part of your federal and state tax refunds and other federal or state
payments, and/or garnish your wages so that your employer is required to send us part of your salary
to pay off your loan.

http://www.pnconcampus.com/
1. What are the eligibility requirements for PNC private student loans (undergraduate)?
- Completed and sent in your Free Application for Federal Student Aid (FAFSA) as soon as possible
after January 1st
- Received an award letter from the school you plan to attend
2. How long can you take to repay private student loans at PNC?
- Up to 15 years
3. What does it mean to have your payments deferred?
- You can choose to pay later
4. What are the current interest rates (APRs)?
- 0.50%
http://www.pnconcampus.com/learningcenter/planningforcollege/whatisfinancialaid/altloansorfed
plus.html
1. What are Federal Parent Loans for Undergraduate Students?
- is a loan program for parents of dependent undergraduate students.
2. What are private loans?
3. Complete the chart below, then answer: Which loan would be best for you AND WHY?
Consider whether you think you will qualify for federal student aid or if your parents will help
you pay for school when writing your answer.
Federal Direct
Stafford Loans

Federal Direct PLUS

Loan

PNC Solution Loan

Borrower

Student

Student

Lender

U.S. Government

Dependent student's biological

or adoptive parent or
stepparent
U.S. Government

Annual Loan Limit

Undergraduates,
$5,500/$12,500
(dependent/independent);
graduate students, $20,500;
medical school students,
$40,500
Undergraduate loans, 4.66%;
graduate loans, 6.21%

Up to 100% of your cost of

attendance minus other
financial aid

Undergraduates: $40,000
Graduate Students: $65,000
Medical Residents and Bar
Exam: $15,000

7.21%

0.25%

0.25%

Fixed from 6.49% to 12.99%

(APRs from 6.26% to 12.99%)
or variable from
LIBOR + 3.30% to LIBOR +
10.25% (currently 3.40% to
10.42% APR) (effective 4/1/15)
0.5%

No payments due until 6

months after graduation or
enrollment in school less than
half time

No payments due until 6

months after graduation or
enrollment in school less than
half time

Interest Rate

Discount for
Automated
Payments
Payment
Deferment

PNC Bank

No payments due until 6

months after graduation or
enrollment in school less than
half time. Making interest-only
payments while enrolled in
school is also an option.

Repayment Loans

10 years with flexibility to

extend up to 25 years, and
multiple repayment options
(visit direct.ed.gov for more
information)
Yes

10 years with flexibility to

extend up to 25 years, and
multiple repayment options
(visit direct.ed.gov for more
information)
Yes

15 years standard repayment*

Credit Check
Required?

No

Yes

Yes

Co-Signer
Required?

No

Borrowers with adverse credit

history may be required to
apply with an endorser

Satisfactory
Academic
Progress
Required?

Yes

Yes

No, unless borrower is under

17. Most PNC Solution Loan
borrowers have applied with a
co-signer, as applying with a
co-signer may increase your
chances of approval
No

FAFSA Required?

No