BU233 Chapter Notes - Chapter 5: Transunion, Home Equity Loan, Credit Bureau
Document Summary
Consumer credit: arrangement to receive cash, goods or services now and pay for them later. Consumer credit in our economy: economists recognize consumer credit as a major force in the north american economy, baby boomers use the most credit (60% of all outstanding debt) Instalment loans where you repay one-time loans in a specific period of time with pre- determined payment schedule mortgages, car loans. Revolving credit/open end credit: many retailers use this type of credit credit card payments, have option to pay bill in 30 days or make smaller payments with incurred interest on top, personal lines of credit ex. Home equity loan - variable interest rates and can get up to 75% of the appraised home value. To get pv of all cash flows (pv + down payment) Lease payments are made at beginning of month. Taxes must be added onto pmt amount when calculating the pv (210. 35 *1. 14975 for qc)
