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? Monthly payments after the down payment
2. What other factors must be considered besides the monthly payment for your car loan when
determining if a car is affordable? Time of the loan, interest rate, gas mileage
3. Define the following terms:
a. APR-The annual rate that is charged for borrowing
b. Down Payment-large upfront payment the shows you have money
c. Additional Finance Charges- is any fee representing the cost of credit, or the
cost of borrowing
d. Loan Term- monetary loan that is repaid in regular payments over a set period
of time
e. Prepayment Penalty- regulates what the borrower is allowed to pay off and
when
4. How does your credit score affect your APR? the lower the credit score the higher the
APR
5. What are 3 lenders you could finance your car through? Wells Fargo, Auto Credit Express,
MyAutoLoan.com
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? Pay it off as fast as you can
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? The interest rates.
2. Explain the relationship between loan terms, monthly payments, and payments overall.
3. How much should a down-payment be? About 10%
4. What website should you use to search for car loan rates? consumerreports
5. Why are local banks in a position to offer competitive loan rates? They are connected to
larger banks that can take risks.
6. Why are credit unions able to offer competitive loan rates? They are so big and if they
lose money once they still have other profits making up for it.
Student Loans
http://www2.ed.gov/offices/OSFAP/DirectLoan/student.html
1. What are Direct Loans? low-interest loans for students and parents
2. What are 3 things you can do with Direct Loans? Borrow directly from the federal
government, Have online access to your Direct Loan account information, Can
choose from several repayment plans
3. How do you apply for Direct Loans? filling out the Free Application for Federal Student
Aid (FAFSA)
4. Define the following in your own words:
a. Subsidized Loan federal student loans for eligible students to help cover the
cost of higher education at a four-year college or university
b. Unsubsidized Loan there is no requirement to demonstrate financial need.
c. PLUS Loan federal loans that graduate or professional degree students and
parents of dependent undergraduate students can use to help pay education
expenses
d. Consolidation Loan it puts all of your payments into one.
5. What are the current interest rates? 4.66% and 6.21%

6. What is the maximum amount you can borrow in your first year of college in a Direct Stafford
Loan? 5,500
7. While youre at school, what can you use Direct Loan money for? Educational expenses
8. Once you graduate, how long is the grace period in which you are not required to make loan
payments? 6 months
9. What is the name of the payment plan that most students repay their loans with?
Automated payments or the standard payments
10.
What can you do if you have multiple federal education loans to make repayment easier?
You can change your payment plan.
11.How many years do you generally have to repay your student loans? 10-25 years
12.
What does EDA stand for and how does it work? Economic development
administration
13.What are 3 options to choose from if youre having trouble making payments on your student
loans? change payment plan, get a deferment, forbearance
14.
What are 2 consequences of going into default on your loans? They might sue you, We
will require you to immediately repay the entire unpaid amount of your loan.
http://www.pnconcampus.com/
1. What are the eligibility requirements for PNC private student loans (undergraduate)?
Students who are enrolled at least half time in a degree or certificate program
2. How long can you take to repay private student loans at PNC? 15 years
3. What does it mean to have your payments deferred? You dont have to pay for a period
of time.
4. What are the current interest rates (APRs)? 3.4% to 10%
http://www.pnconcampus.com/learningcenter/planningforcollege/whatisfinancialaid/altloansorfed
plus.html
1. What are Federal Parent Loans for Undergraduate Students? Cover the remaining cost of
attendance after the other financial aid kicks in.
2. What are private loans? Loans form the federal government
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
Student

Federal Direct
PLUS Loan
Independent
graduate student
U.S. Government

PNC Solution Loan

Lender

U.S. Government

Annual Loan
Limit

Undergraduates,
$5,500/$12,500
(dependent/independent);
graduate students,
$20,500; medical school
students, $40,500

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
Fixed from 6.49% to
12.99% (APRs from
6.26% to 12.99%) or
variable from
LIBOR + 3.30% to

Interest Rate

Undergraduate loans,
4.66%; graduate loans,
6.21%

7.21%

Student
PNC bank

LIBOR + 10.25%
(currently 3.40% to
10.42% APR)
(effective 4/1/15
.5%

Discount for
Automated
Payments
Payment
Deferment

.25%

.25%

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)

FAFSA Required?

Yes

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

Credit Check
Required?

no

yes

yes

Co-Signer
Required?

no

Borrowers with
adverse credit
history may be
required to apply
with an endorser

Satisfactory
Academic
Progress
Required?

yes

yes

No, unless borrower

is under 17. Most
PNC Solution Loan
borrowers have
applied with a cosigner, as applying
with a co-signer may
increase your
chances of approval
no

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*

no