CU Advance Program

Business Math: Lending and Credit (6 courses)

Good math skills are an important core competency for most credit union employees. This course will familiarize you with calculations that are part of the lending and credit functions of a credit union.

Basic Lending Concepts and Calculations
In this course, learn to

  • Identify four reasons math skills are important for credit union employees.
  • Compare and contrast key features of open-end credit and closed-end credit.
  • Define finance charge and annual percentage rate (APR) according to the Truth-in-Lending Act.
  • Describe techniques for converting percentages to decimals, rounding numbers, and counting days when calculating interest.
  • Explain techniques for helping members understand calculations.

Closed-End Loans
In this course, learn to

  • State the formula and calculate a simple interest payment for a closed-end loan.
  • Define amortization.
  • Define balloon loan and describe how payments differ from a fully amortized loan.
  • Describe the process for calculating APR and the finance charge on a closed-end loan.
  • Explain how two loans with the same annual rate of interest can have different APRs.
  • Describe types of nonregular payments and how your credit union handles them.

Mortgage Loans
In this course learn to

  • Calculate mortgage loan interest by using a 360-day year and a 30-day month.
  • Explain how a biweekly mortgage payment reduces total interest paid and loan term.
  • Describe what loan costs members need to consider beyond APR when comparing mortgage loan programs.
  • Explain how a shorter loan term affects interest paid and payment amounts on amortized loans and balloon loans.
  • Define key features of adjustable-rate mortgage (ARM) loans and how they affect monthly payments.
  • Describe special issues regarding principal-only payments and early payoffs on mortgage loans.

Open End Credit
In this course, learn to

  • Define and calculate the average daily balance on an open-end credit account.
  • Define and calculate a daily periodic rate and monthly periodic rate from a given annual interest rate.
  • Calculate the interest for a billing period on an open-end credit account using the daily periodic rate or monthly periodic rate.
  • Explain how grace periods affect interest calculation on open-end credit accounts.
  • Calculate the amount of a minimum payment on a given open-end credit account.
  • Explain how to disclose the APR on a given open-end credit account with no charges other than interest.

    • Loan Ratios
    In this course, learn to

    • Describe the purpose of a ratio and the calculation method.
    • Calculate debt-to-income ratios and explain how credit unions evaluate them according to loan policies.
    • Calculate disposable income for underwriting purposes.
    • Calculate monthly housing expense ratios.
    • Calculate total-obligations-to-income ratios.
    • Calculate loan-to-value ratios.

    Helping Members Compare Rates and Loans
    In this course, learn to

    • Explain the full cost of balance transfers on credit cards.
    • Calculate add-on interest and loan payments and explain when a higher-rate credit union loan costs less.
    • Describe how to compare rent-to-own payment plans to a credit union loan.
    • Calculate the annual rate of interest on a short-term payday loan.
    • Explain how to compare dealer rebates or financing to a credit union car loan.




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