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?
2. What other factors must be considered besides the monthly payment for your car loan when
determining if a car is affordable?
3. Define the following terms:
a. APR This is the annual percentage rate of interest youll pay on the money you borrow. It is the most
important factor in comparing loan terms

b. Down PaymentThe more you put down toward a cars total purchase price, the less you need to borrow. If
you have tarnished credit, a larger down payment may earn you a lower APR due to the decreased risk for
the lender.
c. Additional Finance Charges Lenders may charge additional fees for originating a loan. Be clear on
whether these are rolled into the APR or need to be considered separately.
d. Loan Term The length, or term, of a car loan can stretch to 72 or 84 months.
Six- and seven-year car loans are not recommended. Interest rates will be higher. Plus, such extended loans
with lower monthly payments may cause you to purchase a car that you cant really afford; what if your car
loses all value and needs replacement with two years left on the loan?
36- to 60-month loans are recommended.
e. Prepayment Penalty Lenders may charge a fee for paying off your loan early. This compensates the
lender for their administrative costs in the event they dont earn all the interest they anticipated. Many
lenders, however, do not penalize early payment, so do your research.

4. How does your credit score affect your APR?

Your Credit score will determine what interest rate you qualify

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

Bank, credit union, dealership
6. What does the dealer keep until the loan is paid off?
The lender will hold onto the cars physical title until you pay off the loan.

7. How can you make the process of paying off your car easier?
If you have a setback, contact your lender right away and try to work out a revised payment plan that works for
everyone.

http://www.consumerreports.org/cro/2012/12/how-to-get-the-best-car-loan/index.htm

What should you focus on when comparing auto loans? Keep an eye on a loan's total cost
1.
2. Explain the relationship between loan terms, monthly payments, and payments overall.
They all involve paying back loans
3. How much should a down-payment be? 10 percent
4. What website should you use to search for car loan rates?
The dealerships website
5. Why are local banks in a position to offer competitive loan rates?
Beccause they want you as a customer
6. Why are credit unions able to offer competitive loan rates?
Because they are willing to go as low as possible
Student Loans
http://www2.ed.gov/offices/OSFAP/DirectLoan/student.html

1. What are Direct Loans? Direct Loans are 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?

3.
4.
5.

Borrow directly from the federal government and have a single contactyour loan servicerfor 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.

6. How do you apply for Direct Loans? As with all federal student aid, you apply for Direct Loans by filling out the Free
Application for Federal Student Aid (FAFSA). Most students use

7. Define the following in your own words:

a. Subsidized Loan for students with demonstrated financial need, as determined by federal regulations. No interest
is charged while a student is in school at least half-time, during the grace period, and during deferment periods.

b. Unsubsidized Loan not based on financial need; interest is charged during all periods, even during the time a
student is in school and during grace and deferment periods

c. PLUS Loan unsubsidized loans for the parents of dependent students and for graduate/professional students. PLUS
loans help pay for education expenses up to the cost of attendance minus all other financial assistance. Interest is
charged during all periods.
Consolidation Loan Eligible federal student loans can be combined into one Direct Consolidation Loan.

d.
8. What are the current interest rates? 2.83
9. What is the maximum amount you can borrow in your first year of college in a Direct Stafford
Loan?
10.While youre at school, what can you use Direct Loan money for? Books, dorms
11.Once you graduate, how long is the grace period in which you are not required to make loan
payments? 3 monthes
12.What is the name of the payment plan that most students repay their loans with? automated
13.What can you do if you have multiple federal education loans to make repayment easier?
14.How many years do you generally have to repay your student loans? 25 years
15.What does EDA stand for and how does it work? Event Driven Architecture
What are 3 options to choose from if youre having trouble making payments on your student
loans? Changing repayment plans.

Deferment, if you meet certain requirements. A deferment allows you to temporarily stop making payments on your loan.
Forbearance, if you don't meet the eligibility requirements for a deferment but are temporarily unable to make your loan
payments. A forbearance allows you to temporarily stop making payments on your loan, temporarily make smaller payments, or
extend the time for making payments. Read more aboutdeferments and forbearance.

16.
17.What are 2 consequences of going into default on your loans? Take money away, reach into
your insurance
http://www.pnconcampus.com/

What are the eligibility requirements for PNC private student loans (undergraduate)? be
an undergraduate student in a degree program
be enrolled at least half time as determined by your school

You and your co-signer, if any, must:

be U.S. citizens or permanent residents

have lived in the U.S. for the previous two years
meet the credit guidelines listed below

Please note: A co-signer is typically requi

1.
2. How long can you take to repay private student loans at PNC? 2 years
3. What does it mean to have your payments deferred? Made payment delayed
4. What are the current interest rates (APRs)? It all depends on the credit history

http://www.pnconcampus.com/learningcenter/planningforcollege/whatisfinancialaid/altloansorfed
plus.html
1. What are private loans? Loans That you take from a bank
2. 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

Dependent student's
biological or adoptive parent
or stepparent

Student

Lender

U.S. Government

U.S. Government

PNC Bank

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%

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)

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

10 years with flexibility to

extend up to 25 years, and
multiple repayment options
(visit direct.ed.gov for more
information)
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
No

10 years with flexibility to

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

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
15 years standard repayment*

Yes

Yes

Co-Signer
Required?

No

No

Yes, after 48 consecutive ontime payments; borrower must

pass a credit check

Satisfactory
Academic
Progress
Required?

Yes

Yes

No

Interest Rate

Discount for
Automated
Payments
Payment
Deferment

Repayment Loans

FAFSA Required?

Credit Check
Required?

1.072% of loan amount

Yes