Question

circle whether the statement is true or false

1. true/false a \teaser rate\ on a personal loan does not last and after a specified time is replaced with a higher interest rate.
2. true/false financial institutions are required by law to make sure that you understand the interest rate you will actually be charged after any special deals are taken into account.
3. true/false signing a loan contract means that you are legally responsible for repaying the loan.
4. true/false if you default on a loan, you will lose your down payment and any monthly payments you made.
5. true/false if you default on a loan and the lender repossess your asset and gets all its money back by reselling the asset, you will not be legally liable for the default.

Explanation:

• 8) A "teaser rate" on a personal loan is a temporary, lower - interest rate. After the specified time, it is replaced with a higher rate. So, the statement is True.
• 9) Financial institutions have a legal obligation to disclose the actual interest rate (including all relevant details) when a loan contract is made. So, the statement is True.
• 10) Signing a loan contract means accepting the legal responsibility to repay the loan. So, the statement is True.
• 11) When you default on a loan, depending on the loan type (e.g., in some cases like a down - payment on a leased asset), you may lose the down - payment and other payments. So, the statement is True.
• 12) If the lender recovers all its money by reselling the repossessed asset, the borrower is no longer legally liable for the default. So, the statement is True.

Answer:

1. True
2. True
3. True
4. True
5. True