Lý thuyết tài chính - Using consumer loans

PFINN4Using ConsumerLoans7Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. GITMAN/ JOEHNK/ BILLINGSLEY2Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Know when to use consumer loans and be able to differentiate between the major typesIdentify the various sources of consumer loansChoose the best loans by comparing finance charges, maturity, collateral, and other loan termsDescribe the features of, and calculate the finance charges on, single-payment loansLEARNING OBJECTIVESPFIN4 | CH73Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 5 Evaluate the benefits of an installment loan 6 Determine the costs of installment loans and analyze whether it is better to pay cash or to take out a loanLEARNING OBJECTIVES (continued)PFIN4 | CH7Consumer Loans4Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Formally negotiated contracts that specify the borrowing terms and repaymentTypesAuto loansLoans for other durable goodsEducation loansPersonal loansConsolidation loansPFIN4 | CH7Exhibit 7.15Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. PFIN4 | CH7Federal Government Student Loan Programs at GlanceSource: and accessed August 2014.Consumer Loans6Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Single-payment loanPayment is due in full after specified period Interim financingUse of a single-payment loan to finance a purchase Installment loanRepaid in a series of fixed, scheduled paymentsFixed-rate loansInterest rate and payments remain the same Variable-rate loansInterest rate and payments change periodicallyPFIN4 | CH7Acquiring Consumer Loans7Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Commercial banksConsumer finance companiesCredit unions Savings and loan associationsSales finance companiesLife insurance companiesPFIN4 | CH7Managing Credit8Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Finance charges Loan maturity Total cost of the transactionCollateral Other loan considerationsPayment date, prepayment penalties, late feesPFIN4 | CH7Keeping Track of Debt9Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. List all outstanding consumer debt IncludeInstallment loansStudent loansSingle-payment loansCredit cardsRevolving credit linesOverdraft protection linesHome equity credit linesPFIN4 | CH7Single-Payment Loans10Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Repaid in full on a given due datePayment consists of principal and interest chargesInterim interest payments must be made at timesPayment at maturity = principal + unpaid interestCan be secured or unsecuredCan be taken out for any purposePFIN4 | CH7Features of the Loan11Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Loan collateralLoan maturityLoan repaymentPFIN4 | CH7Loan Collateral12Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Lien: Legal claim permitting the lender to liquidate the items serving as collateral to satisfy the obligationChattel mortgage: Mortgage on personal property given as security for the payment of an obligationCollateral note: Legal note giving the lender the right to sell collateralPFIN4 | CH7Loan Repayment13Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Prepayment penalty: Additional charge you may owe if you decide to pay off your loan prior to maturityLoan rollover: Process of paying off a loan by taking out another loanPFIN4 | CH7Calculating Financial Charges14Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Simple interest methodInterest is charged on the actual loan balance outstandingDiscount methodInterest is computed and then subtracted from the principal, with the remainder goes to the borrowerFinance charges paid in advanceAnnual Percentage Rate is higher than stated interest ratePFIN4 | CH7Simple Interest Method and Annual Percentage Rate 15Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Simple interestFinance charge = principal loan amount x stated annual interest rate x term of loan FS = P x r x tAnnual percentage rateAPR = Average annual finance charge Average loan balance outstandingPFIN4 | CH7Discount Method16Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Calculates finance charges in which interest is computed and then subtracted from the principal, with the remainder being disbursed to the borrowerFd = Fs = P x r x tWhere, Fd = Finance charge calculated using discount methodFs = Finance charge calculated using the simple interest methodP = Principal amount of loanr = Stated annual rate of interestt = Term of loanPFIN4 | CH7Installment Loans17Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Repaying the debt in a series of installment paymentsConvenient loan repaymentTypesCar loans Home furnishingsAppliancesEntertainment centersCamper trailersPFIN4 | CH7Methods of Computing Finance Charges18Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Simple InterestInterest is charged on the outstanding balanceLoan principal declines with monthly paymentsAmount of interest being charged decreasesAdd-on methodFinancial charges on original loan balance Adding the interest to that balancePFIN4 | CH7Prepayment Penalties19Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Additional charge one may owe if he/she decides to pay off their loan prior to maturityRule of 78sKnown as sum-of-the-digits methodCalculating interest that has extra-heavy interest charges in the early months of the loanPFIN4 | CH7Loan or Cash Dilemma20Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Paying cash - Purchase costs more to borrow the money than one can earn in interestLoan - Purchase costs less to borrow the money than one can earn in interestPFIN4 | CH7Consumer loansCollateralSingle-payment loanInterim financingInstallment loanConsumer finance companySales finance companyCaptive finance companyCash valueLoan applicationLienChattel mortgageCollateral notePrepayment penaltyKEY TERMSPFIN4 | CH723Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. Loan rolloverLoan disclosure statementSimple interest methodDiscount methodAdd-on methodRule of 78sKEY TERMSPFIN4 | CH724Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. 23Copyright ©2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part. SUMMARYConsumer loans are important to the personal financial planning processConsumer loans can be used for any purpose Various sources provide consumer loansSingle-payment loan and installment loans are types of consumer loansPFIN4 | CH7