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Strand 5
| Question | Answer |
|---|---|
| Simple Interest | Calculated on the principal, or original, amount of a loan only. |
| APR | The cost you pay each year to borrow money, including fees, expressed as a percentage. |
| Default Rates | Rate of all loans issued by a lender left unpaid by the borrower, An individual loan is typically declared in default if no payments are made for an extended period as per the initial loan agreement. |
| Finance Charges | Any charge payable directly or indirectly by the consumer ans imposed directly or indirectly by the creditor as an incident to or a condition of the extension of credit. |
| Late Fees | A charge imposed on a consumer who fails to make the payment on a dept or other financial obligation by the due date. |
| Minimum Payments | The lowest amount your credit card issuer will accept as payment toward your balance each month. |
| Grace Period | A set length of time after the due date during which payment may be made without penalty. |
| Debt Avalanche | Pay off loans with highest interest first. |
| Debt Snowball | Pay off smallest loan first. |
| Character | Your reputation for repaying debts. |
| Capacity | Your ability to repay. |
| Capital | Your personal investment or savings. |
| Collateral | Assets you can offer to secure a loan. |
| Conditions | The loans terms and the state of the economy. |
| Scholarships | these are monetary awards given to students based on academic, athletic, or other achievements. They don't need to be repaid. |
| Grants | Like Scholarships, grants are forms of financial aid that don't need to be repaid. They are typically based on financial need. |
| Work study | These programs allow students to work part-time, often on campus, to help pay for college expenses. |
| Loans | These are borrowed funds that must be repaid with interest. They can come from the federal government or private lender. |
| Tuition Reimbursement | Some employers offer tuition reimbursement as a part of their benefits package. |
| Military Service | The GI Bill provides education benefits to service members and veterans. |
| 529 Plan | A tax-advantaged savings plan designed to encourage saving for future education costs. |
| Degrees | A degree is an award you get from college when you finish a set of courses. It shows you’ve learned about a subject. |
| Associate Majors | An associate major is a subject you study for about two years at a college. When you finish, you get an associate degree. It’s quicker than a bachelor’s degree. |
| Bachelor Degrees | A bachelor’s degree is a college diploma you earn after about four years of study. It’s usually the first degree you get after high school. |
| Master Degrees | A master's degree is a special diploma you get after college. It means you learned extra about a subject, usually by studying for 1-2 more years. |
| Credit Bureaus | Equifax, Experian, TransUnion |
| Revolving Accounts | A credit line that remains available even as you pay the balance. |
| Installment Loans | Any closed-ended debt that you pay off in monthly amounts, or installments. |
| Student Loans | Money you can borrow from the U.S. Department of Education or a private organization to pay for college and repay later with interest. |
| Mortgages | An agreement between you and a lender that gives the lender the right to take your property if you fail to repay the money you've borrowed plus interest. |
| Payday Lenders | give short-term loans with very high fees, usually due on your next payday. |
| Predatory Lenders | use unfair, sneaky, or harmful tricks to trap people in debt |
| Amortization | Used to lower the book value of a loan or an intangible asset over a set period of time. It focuses on spreading out loan payments over time |
| Co-Signers | A person - such as a parent, family member, or a friend - who adds their information, including income and credit record, to the loan application and pledges to pay back the loan if you're unable to. |
| Closing Costs | Processing fees you pay to your lender when you close on your loan. |
| Unsecured Credit | A loan that doesn't require any type of collateral. Instead of relying on a borrower's assets as security, lenders approve unsecured loans based on a borrower's creditworthiness. |
| Secured Credit | A type of financing arrangement where borrower's provide collateral as security provide collateral as security against the loan. Collateral is an asset or property that the lender can claim if the borrower fails to repay the loan. |
| Collateral | An item, of value that a lender can seize from a borrower if he or she fails to repay a loan according to the agreed terms. |
| Bankruptcy Causes | Uninsured medical costs, family break-up, Divorce, Loss of job. |
| Bankruptcy | Stays on record for 7-10 years. |
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shelbyfinlit.com
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