The Penultimate Loan Quiz

Approved & Edited by ProProfs Editorial Team
The editorial team at ProProfs Quizzes consists of a select group of subject experts, trivia writers, and quiz masters who have authored over 10,000 quizzes taken by more than 100 million users. This team includes our in-house seasoned quiz moderators and subject matter experts. Our editorial experts, spread across the world, are rigorously trained using our comprehensive guidelines to ensure that you receive the highest quality quizzes.
Learn about Our Editorial Process
| By Laurie Wilkinson
L
Laurie Wilkinson
Community Contributor
Quizzes Created: 3 | Total Attempts: 449
Questions: 10 | Attempts: 109

SettingsSettingsSettings
The Penultimate Loan Quiz - Quiz


This is your description.


Questions and Answers
  • 1. 

    What are the max number of loans can a participant have outstanding at a time?  

    • A.

      One for Small Market, One for Mid and Large Market

    • B.

      Two for all Markets

    • C.

      Three for Small Market, Five for Mid and Large

    • D.

      Unlimited for all Markets

    Correct Answer
    C. Three for Small Market, Five for Mid and Large
    Explanation
    Participants can have a maximum of three outstanding loans at a time in the Small Market, and a maximum of five outstanding loans at a time in the Mid and Large Markets. There is no limit to the number of loans a participant can have in all Markets.

    Rate this question:

  • 2. 

    What is the maximum a participant can borrow

    • A.

      100% of their total balance minus earnings but no more than 50K in a rolling 12 month period

    • B.

      50% of their vested balance but no more than 50K in a rolling 12 month period

    • C.

      25% of their vested balance

    • D.

      50% of their vested balance but no more than 25K in a rolling 12 month period

    Correct Answer
    B. 50% of their vested balance but no more than 50K in a rolling 12 month period
    Explanation
    Participants can borrow a maximum of 50% of their vested balance, but the amount borrowed cannot exceed 50K in a rolling 12 month period. This means that participants can borrow up to half of their vested balance, but the maximum limit for borrowing is 50K.

    Rate this question:

  • 3. 

    What is the difference between a home loan and general loan?

    • A.

      There are no differences

    • B.

      ADP does not allow loans on homes

    • C.

      Home loans can be for up to 15 years while general loans are only up to 5

    • D.

      Home loans can be for up to 30 years while general loans are only up to 5

    Correct Answer
    D. Home loans can be for up to 30 years while general loans are only up to 5
    Explanation
    Home loans and general loans differ in terms of the maximum duration for which they can be taken. Home loans can be obtained for a longer period of up to 30 years, whereas general loans have a maximum duration of only up to 5 years. This means that individuals who require financing specifically for purchasing or building a home have the option to repay the loan over a longer period, while general loans are typically meant for shorter-term financing needs.

    Rate this question:

  • 4. 

    How much is the loan fee?

    • A.

      50.00

    • B.

      125.00 for Small Market and Varied for Mid and Large

    • C.

      175.00 for Small Market and 100.00 for Mid and Large

    • D.

      There is not a fee to take a loan

    Correct Answer
    B. 125.00 for Small Market and Varied for Mid and Large
    Explanation
    The loan fee is 125.00 for Small Market and Varied for Mid and Large.

    Rate this question:

  • 5. 

    What is a loan reamortization?

    • A.

      Lowering your payments

    • B.

      Extending the term of the loan

    • C.

      Shortening the number of payments

    • D.

      None of the above

    Correct Answer
    C. Shortening the number of payments
    Explanation
    Loan reamortization refers to the process of shortening the number of payments required to repay a loan. This can be achieved by adjusting the terms of the loan, such as reducing the interest rate or increasing the monthly payment amount. By shortening the number of payments, borrowers can save on interest costs and pay off their loan sooner. This option is beneficial for individuals who want to pay off their debt faster or have a change in their financial situation that allows them to make larger payments.

    Rate this question:

  • 6. 

    A plan should not request a refinance on an employees loan if they have an additional loan available

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    If an employee has an additional loan available, it means they already have access to funds that can be used to repay their existing loan. In this case, requesting a refinance would be unnecessary and potentially burdensome for the employee. Therefore, it is true that a plan should not request a refinance on an employee's loan if they have an additional loan available.

    Rate this question:

  • 7. 

    When a Loan is Re-Amortized, the current interest rate will be used, not the employee's original interest rate

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    When a loan is re-amortized, the current interest rate is used instead of the employee's original interest rate. Re-amortization refers to the process of adjusting the loan repayment schedule, typically by extending the loan term or changing the monthly payment amount. By using the current interest rate, the lender ensures that the loan is recalculated based on the most up-to-date financial conditions. This allows for a more accurate calculation of the loan balance and repayment schedule, taking into account any changes in interest rates that may have occurred since the loan was initially granted.

    Rate this question:

  • 8. 

    As per the IRS regulations, deemed distributed loan is considered as an active loan on our recordkeeping system.  If the plan only allows a participant to have one outstanding loan at a time and they have a deemed loan, we will still allow the participant to take another loan, we will just subtract the deemed loan from the amount available

    • A.

      True

    • B.

      False

    Correct Answer
    B. False
    Explanation
    If the plan only allows a participant to have one outstanding loan at a time, the participant must repay the deemed loan, before they are allowed to take another loan. 

    Rate this question:

  • 9. 

    Is there a 10% penalty if a loan is taken?

    • A.

      Yes, there is upon taking the loan

    • B.

      No, as long as they pay it back there is not

    Correct Answer
    B. No, as long as they pay it back there is not
    Explanation
    It would only incur a penalty if they did not pay it back

    Rate this question:

  • 10. 

    Aside from the active duty military exception, when Re-amortizing or refinancing a loan, the loan must be paid off by the end date of the original loan request. A loan CANNOT be re-amortized for a longer period

    • A.

      True

    • B.

      False

    Correct Answer
    A. True
    Explanation
    When re-amortizing or refinancing a loan, the loan must be paid off by the end date of the original loan request, except for the active duty military exception. This means that the loan cannot be extended or re-amortized for a longer period. In other words, the borrower cannot extend the repayment term when re-amortizing or refinancing the loan. Therefore, the statement is true.

    Rate this question:

Quiz Review Timeline +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 14, 2024
    Quiz Edited by
    ProProfs Editorial Team
  • Oct 01, 2013
    Quiz Created by
    Laurie Wilkinson
Back to Top Back to top
Advertisement
×

Wait!
Here's an interesting quiz for you.

We have other quizzes matching your interest.