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? Up front or car loans
2. What other factors must be considered besides the monthly payment for your car loan when
determining if a car is affordable? Edmunds True Cost to Own Calculator to estimate

other costs, including annual taxes and fees, fuel, insurance, maintenance, and
repairs.
3. Define the following terms:
a. APR-This is the annual percentage rate of interest youll pay on the money you borrow
b. Down Payment-The more you put down toward a cars total purchase price, the less you need to borrow.
c. Additional Finance Charges-enders 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.

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.

4. How does your credit score affect your APR? Your Credit score will determine what interest rate you
qualify for

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

6. What does the dealer keep until the loan is paid off?
7. How can you make the process of paying off your car easier? our lender may put less weight to your
credit score and more on current salary and recent history (90-120 days) of credit card payments. Make timely
payments and take care of your credit!

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? Ultimately, you want to balance a loans total cost
against a monthly payment you can afford

2. Explain the relationship between loan terms, monthly payments, and payments overall.
3. How much should a down-payment be? A lower rate can produce significant long- term savings. For example, a
three-year, $15,000 loan at 5 percent APR would save you nearly $500 overall, compared with the same loan at 7 percent.

4. What website should you use to search for car loan rates? www.bankrate.com.
5. Why are local banks in a position to offer competitive loan rates?
6. Why are credit unions able to offer competitive loan rates?
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. The lender is the U.S. Department of Education (the Department), though most of the contact
will be with your loan servicer.
1.

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

2. 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).

3. Define the following in your own words:

a. Subsidized Loan loan that is lessened

b. Unsubsidized Loan loan that has not been reduced

c. PLUS Loan taxes or payments added onto loan as intrest
d. Consolidation Loan loan to cancel out standing payment
4. What are the current interest rates?
5. What is the maximum amount you can borrow in your first year of college in a Direct Stafford
Loan? The maximum amount you can borrow each year in Direct Subsidized and Unsubsidized Loans depends on your grade
level and on whether you are a dependent student or an independent student.

6. While youre at school, what can you use Direct Loan money for?
7. Once you graduate, how long is the grace period in which you are not required to make loan
payments? Graduate and professional students are not eligible to receive Direct Subsidized Loans for loan periods beginning
on or after July 1, 2012

8. What is the name of the payment plan that most students repay their loans with? Direct PLUS
Loan, a graduate/professional student or the parent of a dependent student can borrow up to the cost of the student's attendance
minus other financial aid the student receives.

9. What can you do if you have multiple federal education loans to make repayment easier?

except for parent Direct PLUS Loan borrowers, if you haven't previously received a loan, you must complete entrance counseling
before your school can make the first disbursement of your loan.
10.How many years do you generally have to repay your student loans? Unless your school does not allow
more than one loan to be made under the same MPN, you can borrow additional Direct Loans on a single MPN for up to 10 years.

11.What does EDA stand for and how does it work?

12.What are 3 options to choose from if youre having trouble making payments on your student
loans?
13.What are 2 consequences of going into default on your loans?
http://www.pnconcampus.com/
1.
2.
3.
4.

What are the eligibility requirements for PNC private student loans (undergraduate)?
How long can you take to repay private student loans at PNC?
What does it mean to have your payments deferred?
What are the current interest rates (APRs)?

http://www.pnconcampus.com/learningcenter/planningforcollege/whatisfinancialaid/altloansorfed
plus.html

What are Federal Parent Loans for Undergraduate Students? The Federal Parent Loan for
Undergraduate Students (PLUS) is a loan program for parents of dependent undergraduate students. Parents may borrow
every year up to the cost of education minus any financial aid (government grants, college scholarships, etc.). There is no
limit to the amount you can borrow, and the loans are based upon a parent's creditworthiness, not financial need.

1.

What are private loans? Private loans are often used to pay for college. They are available to eligible
creditworthy students and co-signers attending eligible schools.

2.
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

Dependent student's
biological or adoptive parent
or stepparent

Student

Lender

U.S. Government

U.S. Government

U.S. Government

Annual Loan Limit

Undergraduates,
$5,500/$12,500
(dependent/independent);
graduate students, $20,500;
medical school students,

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

$40,500

Interest Rate

Undergraduate loans, 4.66%;

graduate loans, 6.21%

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

Repayment Loans

10 years with flexibility to

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

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.
15 years standard repayment*

FAFSA Required?

Yes

Yes

No

Credit Check
Required?

No

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

Discount for
Automated
Payments
Payment
Deferment