Loans Flashcards
(33 cards)
What is GAP protection?
Pays the deficiency between what is owed and what the insurance covers.
When using GAP protection, how much does the insurance cover?
Insurance covers up to the depreciation value.
What are the 3 parts of GAP protection?
Deficiency, GAP advantage, and ADR.
What is GAP advantage?
Replacement vehicle within 90 days can get $1000.00 to put towards the replacement of an auto loan only.
What is GAP advantage included in?
The GAP package. - Can apply to other auto loans if the claim to for an ATV etc.
What us ADR?
Auto Deductible Reimbursement- protection that covers the collision (accident) deductible on the members personal car insurance policy.
- Any vehicle they are titled and insured on up to a $500.00 deductible for the first 2 years.
What is Debt Protection?
Debt cancellation- if an event happens, this loan product can cancel all or part of debt…
1. Life, Disability, involuntary unemployment
2. Disability and involuntary unemployment
3. Life and Disability
4. Life
What is DPW?
Depreciation Protection Waver- secures down payments/ trade in value/ protects payment.
What are the rules of DPW?
- Secures/ locks in the value of the vehicle for the life of the loan
- Offered only on auto loans if the loan has positive equity or owe less than the vehicle
-Equal to the difference between vehicles retail value at the time of DPW purchase
What does MBI stand for?
Mechanical Breakdown Insurance
What is MBI?
A specialty type of car insurance coverages repairs not related to routine maintenance, wear and tear or accidents. Pays for transmission failure or engine problems, basically mechanical problems.
What is Reg B?
Equal credit opportunity act- protects applicants from discrimination in any aspect of a credit transaction.
What is Reg Z?
Truth in Lending Act- consumer protection laws that requires disclosures about the terms and cost of credit
What is ARP?
Annual Percentage Rate- the rate charge on an account. Most important item address by Reg Z
What is MLA?
Military Lending Act- applies to active-duty service members, spouses, and certain dependents to limit interest rate changes on many consumer loans. (Not to exceed 36%)
What is MAPR?
Military Annual Percentage Rate- the cost of consumer credit expressed as an annual rate that may not exceed 36%.
What is Risk Based Pricing?
Lenders offer different consumers different interest rates or other loan terms based on the estimated risk that consumers will fail to pay back their loans. (Loan rate sheet/ matrix)
What is Reg V? - or FCRA?
Fair Credit Reporting Act- Promotes the accurate, fairness, and privacy of information in the files of consumer reporting agencies.
What is underwriting?
The process by which lenders decide whether an applicant in creditworthy and should receive a loan.
What are the steps of underwriting?
- Preapproval
- Income/ asset verification
- Appraisal
- Title search/ insurance
- Making a lending decision
What is Disposal income?
The amount of money left to spend or save after income taxes have been deducted
What is DTI?
Debt to income ratio- all monthly debt payments divided by your gross monthly income
What is gross income?
Pay earned before taxes and deductions
How to calculate LTV? Loan to value
Loan balance divided by the value
