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DECA PFL District 26
| Question | Answer |
|---|---|
| Alternate Financial Services | Payday loans, Check-Cashing Services, Pawnshops, Instant Tax Returns. Bonus: Title Loans & Rent-To-Own Homes |
| "FAST" for ASF Targets | F - Fast Cash Needed, A - Access to bank limited, S - Subprime / Low Credit Scores, T - Traditional requirements unmet |
| Payday Loans | Short-term, high-interest loans you pay back on next payday |
| Check-Cashing Services | Allow you to get cash for checks w/o a bank account |
| Pawnshops | Your stuff = collateral |
| Instant Tax Return Loans | Your tax return = collateral. Can borrow up to tax return amount |
| Title Loans | Your car = collateral. Can borrow 25-50% of car value max, but owe back in 15-30 days. |
| Rent-To-Own Homes | You pay for ownership as you "rent" it |
| Pros of AFS - SPEED | S - Speedy lending, P - Poor credit ok, E - Easy, E - Emergency, D - Direct Cash |
| Cons of AFS - RISK | R - Rollover debt, I - Interest Rate High, S - Short-term , K - Keeps you unbanked |
| ChexSystems | A system used by banks to see if you have a history of fraud, overdrafting, ect. |
| Crash Diet v Long Term Fitness | Allegory to explain using AFS v. a Traditional Bank |
| Payday Loan Debt Cycle | Need $ -> High Interest Loan -> Pay soon -> Inability, need $ again |
| Why use ASF? | Medical bills, rent/utility shutdown, immigration, service denied (low credit score), IRREGULAR PAY (GIG WORK) |
| How to escape ASF? | Second-chance checking, pay advanced |
| Second-chance checking account | Limited checking account as a "redemption" opportunity for those w/ struggling finances. |
| Protected by TRUTH IN LENDING ACT (Rate-ml) | R - Rate (APR), A - Added Fees, T - Total Cost, E - End Penalties (Late Fees), M - Minimum Payment , L - Loan Terms |
| Equal Credit Opp. Act | Protects credit discrimination in age, race, nat., disability |
| Consumer Financial Protections Bureau (CFPB) | Credit rights, complaints, tools, calculators |
| Federal Trade Commission | Fraud prevention, consumer rights |
| Department of Justice | Anti-discrimination protections |
| TRUST for Source Verification | T - Timely, R - Refs. Laws, U - Unbiased, S - Sources, T - Transparent Authors |
| Lead to bankruptcy | Medical bills, divorce, job loss, economy crash |
| Liquidation Bankruptcy | Ch. 7, on report 10yrs, assets liquidized, low income, few month plan, "clean slate" |
| Reorganization Bankruptcy | Ch. 13, on report 7yrs, assets kept, high income, 3-5 year plan, "rewrite" |
| Negative Impacts of Missing Loan Payments | Credit score damage, accumulating costs, assets lost, emotional dmg |
| STEPS to repay loans | S - Survey debts, T - Tighten budget, E - Execute repayment, P - Partner w/ creditors , S - Safeguard |
Created by:
spro_ut
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