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6.02
Credit Basics
Term | Definition |
---|---|
alternative credit | source of credit (may combine some open- and closed- end credit); higher interest rates and fees |
closed-end (installment) credit | loan; must repay by specific terms |
open-end (revolving) credit | extended line of credit established in advance; (do not have to apply for credit every time it is desired; inspecific in payment terms |
pawn loan | loan based on one's personal property value |
payday loan | short-term loan; provides immediate cash by 1)securing a borrower's written check, or 2)receiving authorization for automatic withdrawal from the borrower's bank account |
refund anticipation loan | short-term cash advance secured by a taxpayer's expected tax refunds |
rent-to-own | tangible items leased w/ conditions that the item will be owned by the renter if the term of rent is completed |
title loan | borrower gives the lender his automobile title in exchange for a set amount of cash; when loan is repayed, title is returned |