FHCE 2100 Lecture Notes - Lecture 12: Janet Yellen, Unsecured Debt, Credit History

• School: University of Georgia
• Department: Financial Planning, Housing and Consumer Economics
• Course: FHCE 2100
• Professor: Carswell

Document Summary

Single payment (balloon) vs. installment loans (amortized) Variable rate (tied to other national rate) vs. fixed rate: federal chair (janet yellen) determines the national rate. All of the conditions of the loan, the apr, the number of payments, total amount financed, how interest is calculated. Insurance agreement clause: requires you to purchase life insurance that will payoff your loan after death, normally only benefits the lender, increase your total loan cost. Acceleration clause: requires the entire loan to be paid-in-full if you miss just one payment, standard on most loans, normally not invoked if you make a good effort to pay. Chapter 7: liquidation give up stuff, keep money (for consumers) Chapter 13: repayment 3-5 years, keep stuff, give up money (consumers) Chapter 11: business reorganize debt (hostess, delta, gm) Bankruptcy stays on credit report for 10 years. Automobile loans: consumer loan secured with an automobile, lower interest than unsecured loan, normally has maturity length of 2-6 years.