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? Estimate other costs, including annual taxes and
fees, fuel, insurance, maintenance, and repairs.
3. Define the following terms:
a. APR- annual percentage rate of interest youll pay on the money you
borrow.
b. Down Payment- The money you put down to pay for a car to lessen your
monthly payments
c. Additional Finance Charges- Lenders may charge additional fees for originating a
loan.
d. Loan Term- The length, or term, of a car loan can stretch to 72 or 84 months.
e. Prepayment Penalty- Lenders may charge a fee for paying off your loan early
4. How does your credit score affect your APR? Can make you a credit risk
5. What are 3 lenders you could finance your car through?
6. What does the dealer keep until the loan is paid off? They keep the deposit
7. How can you make the process of paying off your car easier? You can save your money for
a while before you get the car.
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? You should focus on is the annual
percentage rate (APR), which varies from day to day.
2. Explain the relationship between loan terms, monthly payments, and payments overall.
When you buy a car you read the loan terms then you see how much your monthly
payments and you lastly see the grand total amount.
3. How much should a down-payment be? It should be 10% of the total payment
4. What website should you use to search for car loan rates? Your company car website
5. Why are local banks in a position to offer competitive loan rates? They have to compete
with the big companies to get your loans.
6. Why are credit unions able to offer competitive loan rates? They offer that because they
can get you anyway.
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.

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? you apply for Direct Loans by filling out the Free
Application for Federal Student Aid (FAFSA)
3. Have online access to your Direct Loan account information via your servicer's website.
4. Can choose from several repayment plans, and you can switch repayment plans if your needs
change.
5.
6. Define the following in your own words:
a. Subsidized Loan Loans that are available to undergraduate students with
financial need.
b. Unsubsidized Loan no requirement to demonstrate financial need.
c. PLUS Loan a student loan offered to parents of students enrolled at least half
time in eligible programs
d. Consolidation Loan the combining of several unsecured debts into a single
7. What are the current interest rates? 1.73%
8. What is the maximum amount you can borrow in your first year of college in a Direct Stafford
Loan? as much as $9,500
9. While youre at school, what can you use Direct Loan money for? Anything school related
10.
Once you graduate, how long is the grace period in which you are not required to make
loan payments? For the next eight years
11.What is the name of the payment plan that most students repay their loans with?
12.What can you do if you have multiple federal education loans to make repayment easier? You
should get an accountant
13.How many years do you generally have to repay your student loans? About 5
14.What does EDA stand for and how does it work? It helps you pay off the loans
15.What are 3 options to choose from if youre having trouble making payments on your student
loans? Take out another loan, pay them off or make a deal with the student loan
people.
16.What are 2 consequences of going into default on your loans? Your credit score gets bad
and you cant get out of debt for a long time.
http://www.pnconcampus.com/
1. 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
2. How long can you take to repay private student loans at PNC? 15
3. What does it mean to have your payments deferred? To have them got rid of
4. What are the current interest rates (APRs)? Variable rate loan interest rates range from
3.47% to 10.42%
http://www.pnconcampus.com/learningcenter/planningforcollege/whatisfinancialaid/altloansorfed
plus.html
1. What are Federal Parent Loans for Undergraduate Students? The parents sign the loans
2. What are private loans? Your own loan without your parents
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.

Borrower

Federal Direct
Stafford Loans
Dependent
student's biological

Federal Direct PLUS

Loan
Independent
graduate student

PNC Solution Loan

Student

or adoptive parent
or stepparent
U.S. Government

U.S. Government

U.S. Government

Up to 100% of your
cost of attendance
minus other
financial aid
7.21%

Up to 100% of your
cost of attendance
minus other
financial aid
7.21%

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

Discount for
Automated
Payments
Payment
Deferment

4.288% of loan
amount

4.288% of loan
amount

0.25%

0.25%

0.5%

Repayment Loans

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

FAFSA Required?

Yes

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.
No

Credit Check
Required?

Yes

Yes

Yes

Co-Signer
Required?

No

No

Satisfactory
Academic
Progress
Required?

Yes

Yes

Yes, after 48
consecutive ontime payments;
borrower must
pass a credit check
No

Lender
Annual Loan Limit

Interest Rate

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%