vocabulary
meaning of: fixed rate
interest rate always remains the same.
What is a loan?
A loan is money lent by one party to another at interest
When you receive an installment loan or mortgage, you must ___ _ _____ agreement to repay the loan within a certain period of time
sign a written
How do you maintain and get good ratings on your card?
To get the best credit rating, you need to pay your bills on time.
What percentage do experts recommend not using more of their salary on credit payments?
20%
meaning of: principal
amount of borrowed money that is still owed and on which interest is based.
Give an example of a credit card commonly used
(dependant)
What makes a loan a secure load?
it is backed by a collateral
why is maintaining a good credit rating is essential
a good credit rating is essential for obtaining a loan or credit card.
What can happen if you do not fulfill your payment
A court order could occur
Word: loan is backed by collateral.
secured loan
What do credit cards do?
allows consumers to borrow money that will be paid back with interest
FREE POINTS :DDDDD
YIPEEEEEE
What happens when someone has a high credit score?
They become eligible to many different cards.
If the creditor does not receive payback, what do they obtain the rights to?
the creditor has the legal right to repossess or take back the item they purchased on credit.
Meaning: an interest rate that fluctuates or changes over the life of the loan.
variable rate
What do most loans require and how are they paid back in?
Most loans require collateral and are paid back in installments.
What makes a loan unsecured?
loan is not backed by collateral and has higher interest rates.
Why are high-interest rates associated with low credit?
To insure that the the card provider will not end up with a net negative
what are some signs you are in trouble with maintaining your credit?
not making monthly loan payments and minimum monthly payments on credit cards, receiving second and third payment-due notices from creditors, getting calls from bill collectors, and garnishing wages.
Word: the total amount it costs the borrower to have the lender finance the loan.
finance charge
What does the truth-lending law say?
According to the Truth in Lending Law, the lender must provide the borrower with the APR and all the finance charges of the loan.
Give an example of a secure loan and an insecure loan on objects.
Loans on a car or boat are secured, mortgages are secured, and credit card debt is unsecured
What happens to consumers with low ratings?
Consumers with low credit ratings are usually given higher interest rates and more restrictive restrictions
Wh at should one do if their credit card debt is starting to pile up?
(free form answer)