# 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.
| By Laurie Wilkinson
L
Laurie Wilkinson
Community Contributor
Quizzes Created: 3 | Total Attempts: 446
Questions: 10 | Attempts: 109

Settings

• 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

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

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

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

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.

• B.

Extending the term of the loan

• C.

Shortening the number of payments

• D.

None of the above

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

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

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

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

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.

• A.

True

• B.

False