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Borrowing
| Question | Answer |
|---|---|
| Credit | merely a tool to buy something now and pay for it later |
| Microloans | Short-Term Loans |
| Instant Gradification | didnt budget for the purchase and dont want to wait until you have the money to buy the item |
| Principal | in exchange for your promise to re payh the money later, usually with interest |
| Interest | the amount you pay to use someone else's money |
| Simple Interest Formula | a quick way to calculate interest |
| Amortization Calculation Formula | figure out an average payment amount for each period |
| APR | the interest rate calculated in a consistent way |
| Introductory APR | rate for a short period to tempt you to borrow |
| Fixed Interest Rate | the same for the life of the loan or account |
| Adjustable or Variable Interest Rates | change at specific times |
| Maturity Date | The final payment date of a loan |
| Loan Term | the amount of time you're obligated to make payments |
| Annual Fee | A yearly fee for having an open account |
| Cash Advance Fee | Fee for withdrawing cash on your credit account |
| Over the Limit Fee | Fee will be applied to your account each time you go over your limit. |
| Credit Limit | the maximum amount you can borrow at any one time. |
| Grace Period | the amount of time before interest starts accumulating on charged purchases. |
| Loan Term | Longer terms typically have lower payments but accumulste more interest. |
| Origination Fee | a charge to process your loan. |
| Prepayment Penalty | always check before making a loan commitment to know about any extra charges if you make early payments. |
| Down Payment | Money you pay upfront toward the purchase to reduce the loan amount. |
| Discount Points | Lenders offer interest-rate discounts as incentives. |
| Revolving Credit | lets you borrow up to a maximum dollar amount whenever you want without applying for credit each time. |
| Installment (Closed-ended Credit) | the entire loan amount is paid to you at once. |
| Cash Loans | no specific purpose and simply pay the borrowed funds directly to you. |
| Service Credit | lets you pay in full usually monthly for a service as charges add up. |
| Authorized User | able to use the credit-car daccount but is not legally liable for the balance due to the account |
| Joint Account Holder | responsible for the balanced of the account along with the other person named on the account and is legally liable for any amount due |
| Capital | Cash on hand |
| Capacity | HAve more money coming in then out |
| Character | Check your reputation for repaying what you owe. |
| Collteral | Partial compensation for what you owe |
| Conditions | Past credit troubles if you can prove you are moving past a bad experience |
| Credit Reports | Detail how a person used credit in the past |
| Cosign | Someone who can agree with you |
| Cosigner | Agrres to repay the debt if you dont |
| Credit Score | A three-digit numbert based on the person's credit report |
| Subprime Borrower | someone lenders see as a big credit risk |
| Identity Theft | your identification documents are taken or online personal files are hacked without your permission |
| Identity Fraud | your personal information is used to make purchases, withdraw chas or set up new accounts without your approvsl |
Created by:
tdelzeith
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