Lesson 3

Lesson 3

LOANS

Vocabulary

Loan-money that one party gives to another to use temporarily

Loan department-the section or division of a bank that takes care of loans

Loan officer-officer of the bank who interviews people who went to borrow money

Loan application-the form that the customer fills out when he went a loan

Currently-at the present time, at this moment

In effect-valid,currently in uses

Commercial loans-money that banks to businesses

Personal loans-money that banks lend to individual borrowers

Collateral- property or money that a bank as security for a loan

Credit file –information about a bank customer who wants to borrow money

To pay back-to return the money that you borrow ( also: repay )

Charge account-an account that allows a customer to get merchandise or services immediately, but pay later

Charge card-a piece of plastic with the name of the charge account holder and his charge account number. The account holder presents this card when he uses his charge account to buy something.

Expansion

To borrow-to take money from someone and to promise to return it

To lend- to permit someone to use your money temporarily with the

Understanding that she has to return it.

I need to borrow some money. Can you land me $100.000?

The party who lands the money is the lender. The party who borrows the money is the borrows.

Term-period of time

The term of the loan is three years.

Principal-the amount of money that the lender lends to the borrower

Due-payable at the particular time

Payments are due on the first of every month.

To default-not to pay money that is due.

To take possession of-to become the owner of to take property from another person.

If you default on your car loan the bank will take possession of your car to pay off - to finish paying back

Before you borrow any more money, you should pay off your debts to compute – to figure to calculate

The bank computes interest payments on the principal tenure – the term of the loan

Long term loans may have a tenure of ten years credit rating- the amount, type and term of loans that the credit department of a bank decides that it can offer a customer creditor- lender debtor-borrower, someone who has debts

Vocabulary Practice

Select the answer that correctly completes each sentence.

1.If you need money I can ___ you some.

a.pay back b.borrow c.lend

2.When my friend needed a loan he offered the bank his house as___

a.debt b.term c.collateral

3.James has not paid back two loans. He must have a terrible___

a.Credit Rating b.charge card c.principal

4.If you___your car loan, the bank will take possession of your car

a.pay off b.default on c.compute

5.In order to calculate the monthly payments on your loan, the bank adds the interest to the___ and divides the total by the number of month

a.tenure b.principal c.charge account

AN AUTO LOAN

John Baker works in the loan department of a bank in Denver, Colorado.He is a loan officer.Stanley Fanelli has an appointment with him now to ask about a loan. He needs money to buy a new car.

Mr.B Hello,Mr.Fanelli.Please have a seat. What can I do for you today?

Mr.F I want to borrow some money to buy a car. A friend of mine, Jack Richardson, bought a new car last week . He told me that he got his loan here

Mr.B Oh yes.I remember him. I was the loan officer who spoke with him

Mr.F He said that you were very helpful.I know very little about loans and I hope you can explain things to me

Mr.B I will certainly try. What questions did you have for me?

Mr.F First,I want to know if loans for buying cars are commercial loans or personal loans

Mr.B Neither,Mr.Fanelli.They’re auto loans. A commercial loan is principal that banks lend to businesses. Personal loans are made to individuals, but not for buying cars.

Mr.F What about interest rates

Mr.B The rate of interest currently in effect on auto loans is 16%

Mr.F For how long will I have to make monthly payments?

Mr.B The term of the loan is three years, so there will be 36 monthly payments

Mr.F Do I have to give the bank any collateral?

Mr.B The car serves as collateral. If you default, the bank can take possession of the cars. The bank also checks your credit file to make sure that you always paid back your loans in the past. Do you have any charge accounts?

Mr.F My wife and I bought our furniture wirh our charge card and we even used it to buy airplane ticktes for out vacation in California last year. We paid all about those debts promptly.

Mr.B That’s very good. I assume there will be no problem.But the first thing you have to do is fill cut this loan application

MR.F Thank you very much.I’ll start right now

Comphrehension Check

A.State whether each statement is true or false on the dialogue between John baker and Stanley Fanelli

1. Mr.Fanelli needs a loan to buy his new car

2. A teller gave him the loan

3. Car loans are personal loans

4. The tenure of auto loans is three years

5. Mr.Fanelli doesn’t have any charge account

B. Answer the following questions orally.

1. Which part of the bank takes care of loans?

2. What do you have to fill out if you went a loan?

3. How did Mr. Fanelli learn about loans?

4. What kind of loans is commercial loans?

5. Will Mr. Fanelli make monthly payments?

6. What is the current rate of interest on car loans?

7. How does Mr. fanelli’s new car serve as collateral for the loan?

8. How does the bank decided whether or not to give Mr. Fanelli a loan to buy a new car?

9. What did Mr.Fanelli angd his wife use their charge card for?

10. Did Mr. Fanelli and his wife pay off their debts in the past?

C. Composition. Write a short paragraph explaining what a bank customer has to do in order to get and auto loan.

Building Your Vocabulary

A. Find the words in the right-hand column that match I meaning the words in the left-hand column

1. In effect a. commercial loan

2. Pay back b. collateral

3. Security c. debtor

4. Calculate d. valid

5. Term e. currently

6. At present f.tenure

7. Business loan g. repay

8. Borrower h. compute

9. Money you owe i. default

10. Not pay off j.debt

B. Make each pair of sentences have the same meaning by completing the second the second

Sentences of each pair with the proper form of one of the new words of this lesson.

Model: she look out a loan for $10.000.

The of her loan was $10.000. answer : principal

1. The bank checks information about borrows.

The bank checks borrowers

2. I can buy things at the store with may charge card.

I have a at that store.

3. At last I don’t owe the bank any more money.

I’ve my loan.

4. He owes money to a lot of people

He has a lot of___

5. I have to pay back the loan in six month

The bank gave me a short___loan

PRESENTATION

I.More irregular past tense forms

Buy Bought Stanley Fanelli bought a new car

Know Knew Stanley knew very little about loans

Lend lent The bank lent Stanley money

Make made John Baker made a lot of money last year

Mean Meant He meant he applied for a loan

Pay paid They paid off their debts promptly

See saw I saw the manager of the bank

Take took The bank took possession of his car

Tell told The employee told me the current rate of interest

Think thought I thought it was difficult to get a loan

II.Combining sentences :sentence with two clauses

I know something.He works in a bank.

- I know (that) he works in a bank

He sees something.They have a new car

- He sees (that) they have a new car

See

Know

Think

Beliee

I Guess (that)they bought a car

Suppose

Say

Mean

Hope

Structure Practice

A. Restate each of the following sentences in the past. Then make each sentence negative.

Model : I see Bill. - I saw Bill.

- I didn’t see Bill.

1. Bill buys a new car.
2. The bank lends him the money.
3. He tells me about it.
4. He makes a payment every month.
5. He pays off the loan in four years.

B. Combine each pair of sentences into one.

Model : The loan department is closed. I know it.

- I know the loan department is closed.

1. Interest rates are high. We believe it.
2. Al defaulted on his load. Marry said that.
3. The Browns are not in debt. Everyone supposes so.
4. You have filled out your loan application. I see that.
5. You have enough information. Do you mean that?

C. Rewrite each question and answer as a single sentence having two clauses

Model : “Does Nancy have a new car ?”

“Bill say so”

- Bill says ( that ) Nancy has a new car.

1. “Are isterest rates high for car loans?”

“ I guess so”.

2. “Do george and ellen haven a good credit rating”

“The bank thinks so”.

3. “Do they need a load ?”

“We suppose so”.

4. “Is it easy to open a charge account?”

“We hope so”.

5. “Does the bank ask for collateral for commercial loans?”

“they know so”.

D. Use each string to write a two-clause sentence based on the lesson dialogue. And any necessary word.

Model : Bill/see/Stanley/buy/new car

- Bill sees that Stanley buys a new car

1. Standley fanelli/say/bank/lend him/ money

2. Standley/think/be complicated/to get a loan

3. Jonh barker/explain/be easy/to get a loan

4. bank/know/standley/always/pay back/debts

5. John Barker/suppose/standley/have/charge accounts

Building Sentence

A.Complete each sentences by adding the appropriate preposition.

1. What is the interest rate now effect?
2. Banks lend money businesses and private individuals.
3. You can get a personal loan 15% interest.
4. He’s thinking buying a new car.
5. Did you pay for the hotel room your charge card?

B.Select the form of the verb that correctly completes each of the following sentences.

a. Do you mind my ?

a. ask b. asking

b. I have to some money.

a. borrowing b. borrow

c. Can you me any ?

a. lending b. lend

d. She told me about in the bank.

a. waiting b. wait

e. I asked the teller things.

a. to explain b. for explaining

C.Restate each short sentence by moving the underlined noun to a position before the preceding noun. The sentences form a connected story.

Model: She works in the bank for saving.

- She works in a savings bank.

1. I wanted a loan for a car.
2. I filled out an application for the loan.
3. I asked about the rates of interest.
4. The bank checked the file on my credit.
5. They gave me a loan for three years.

BANKING CONVERSATIONS

1. Explain to a customer what she has to do to get a loan to buy a car.
2. Discuss some of the different kinds of loans that are available at your bank.