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Finance
| Term | Definition |
|---|---|
| Creditor | A creditor is an individual, company, or institution that lends money or extends credit to a second party, who is known as the debtor or borrower. |
| Capital | Capital is a versatile word that most commonly refers to financial wealth used for investment, a primary city where a government sits, or an uppercase letter |
| Collateral | AI Overview Collateral is an asset that a borrower pledges to a lender to secure a loan |
| Principal | original amount of money borrowed, lent, or invested, separate from any interest, earnings, or fees |
| Finance charge | the total cost of borrowing money or using consumer credit, expressed as a dollar amount |
| Debt collector | person or company that regularly collects or attempts to collect past-due debts originally owed to someone else. |
| Credit bureau | a company that collects personal and financial data from lenders and public records to compile consumer |
| Character | represents a borrower's reputation, trustworthiness, and track record for repaying debts. |
| Credit report | a detailed record of your past and present borrowing, debt management, and bill-payment history compiled by a consumer reporting agency |
| Capacity | a borrower's financial ability to repay a loan or handle additional debt based on their income, cash flow, and existing obligations |
| Credit history | A credit history is a detailed record of how an individual borrows and repays debts over time |
| Credit rating | credit rating is an independent evaluation of a corporation's or government's ability to repay its debt obligations |
| 20/10 rule | a personal finance guideline that limits your non-housing consumer debt to no more than 20% of your annual take-home pay and your monthly debt payments to no more than 10% of your monthly take-home pay. |
| Debtor | creditor. |
| Bankruptcy | the terms of a plan that governs repayment of its debts. |
| Secured loans | a loan that requires the borrower to pledge a valuable asset as collateral to back the borrowing |
| Unsecured loans | An unsecured loan is a financial term for a loan that does not require any collateral |
| Reaffirmation | Chapter 7 bankruptcy where a debtor promises to repay a specific debt that could otherwise be wiped out. |
| Involuntary bankruptcy | is a legal process initiated by creditors to force a debtor into bankruptcy when they fail to meet significant debt obligations |
| Voluntary bankruptcy | a bankruptcy proceeding that a debtor initiates because they cannot satisfy the debt. |
| Discharged debts | a legal release from personal liability to repay a specific debt |
| Liquidation | winding-up is the process in law by which a company is brought to an end and its assets and property distributed to claimants |
| Reorganization | a major structural change in a business’s ownership, legal setup, operations, or finances to improve performance or fix money problems |
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