AFIP Credit and Lending Products Flashcards
6 cards from real AFIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AFIP Credit and Lending Products flashcards as text
What is the purpose of a co-signer on an auto loan?
Answer: To provide additional creditworthiness when the primary borrower's credit is insufficient
A co-signer strengthens the application by adding their credit and income to the deal, making them equally liable for repayment.
Which regulation governs the collection and use of consumer credit information by credit reporting agencies?
Answer: Fair Credit Reporting Act (FCRA)
The FCRA regulates how consumer reporting agencies collect, share, and use credit information, and gives consumers the right to dispute errors.
A balloon payment loan in the context of auto financing means:
Answer: A large lump-sum payment is due at the end of the loan term
A balloon loan has lower monthly payments with a large final payment due at maturity, after which the borrower may pay off, refinance, or return the vehicle.
Under the Equal Credit Opportunity Act (ECOA), a lender CANNOT deny credit based on which of the following?
Answer: National origin
ECOA prohibits credit discrimination based on race, color, religion, national origin, sex, marital status, age, or receipt of public assistance.
What does 'front-end profit' refer to in a dealership F&I context?
Answer: Profit earned from the vehicle sale itself (gross on the car)
Front-end profit is the gross profit on the vehicle transaction, while back-end profit comes from F&I products and financing.
Which document legally establishes the terms of a consumer auto loan in a dealership sale?
Answer: Retail Installment Sales Contract (RISC)
The Retail Installment Sales Contract (RISC) is the binding agreement that sets out the purchase price, down payment, APR, monthly payment, and all loan terms.