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Lawson-EPF
Unit 5 Vocabulary
| Question | Answer |
|---|---|
| adjustable-rate mortgage | a mortgage in which the initial interest rate is normally fixed for a specified period of time after which it is reset periodically, often every month |
| amortization | the paying off of debt over time in equal installments: part of each payment goes toward the loan principal while the other part goes to interest |
| annual fee | a yearly fee that may be charged for having a specific credit card, independent of how you use the card |
| annual percentage rate | the cost you pay each year to borrow money, including fees, expressed as a percentage |
| authorized user | a person who has permission to use and/or carry another person's credit card, but is not legally responsible for paying the bill |
| balance transfer | the act of transferring debt from debt from one credit card to another, usually for a fee |
| cash advance | a credit service that allows cardholders to withdraw a certain amount of cash, either through an ATM or directly from a bank, typically at a high interest rate or for a fee |
| cash back | a credit card benefit that pays the cardholder a small percentage of their net expenditures, often as cash, payment toward their balance, reward points, travel miles, or gift cards |
| collateral | something valuable that the lender can take as payment if you cannot or do not repay your secured loan |
| consolidation loan | a loan that combines two or more education loans into a single loan, allowing the borrower to make a single monthly payment |
| cosigner | someone who legally agrees to take responsibility for a person's debt if they cannot repay it |
| credit card agreement | a legal document that outlines the terms and conditions for using your credit card |
| credit limit | the maximum amount that may be borrowed on a credit card |
| default | long-term failure to repay a loan according to the terms agreed to, which has a substantial negative impact on the borrower's credit score |
| down payment | a partial payment made in cash at the beginning of the purchase of a good or service, while the remaining balance is due later or is financed as part of a loan |
| fixed-rate mortgage | a loan with an interest rate that does not change over the life of the loan |
| grace period | the number of days between a borrower's statement dae and when the payment is due, often without accruing interest |
| home equity | the value of ownership built up in a home or property that represents the current market value of the house minus any remaining mortgage payments |
| installment loan | loan used to finance a specific purchase for a specific amount of time, during which regular down payments pay the accrued interest and a portion of the principal |
| introductory APR | the typically low rate charged during the introductory period after a credit is opened, after which the regular, typcially higher, APR will apply |
| minimum payment | the smallest amount of a credit card bill that a credit card holder must pay during a billing cycle in order to remain in good standing with the lender |
| penalty APR | a higher interest rate triggered by being late with or missing a credit card payment |
| principal | original amount of money borrowed, separate from interest or fees |
| Schumer Box | a standard table that legally must appear in a credit card agreement showing basic information about the card's rate and fees |
| term | the amount of time you have to repay your entire loan |
| variable-rate loan | a loan in which the interest rate can change, based on prime rate or index rate, over the course of the loan |
Created by:
billie.perkins