Category-1
Whenever you borrow money, you must sign an agreement called a "________"
Promissory Note
The loan amount you borrow is called the "_________"
Principal
The interest rate you pay is given per year called "___"
The Annual Percentage Rate (APR)
The "_______" is the person who agrees to pay back the loan if the borrower is unable to.
Cosigner
A creditor often requires a borrower to have "______"
in the event the borrower dies before the loan is paid off.
Life Insurance
"Prepayment Privilege is "____________________"
Allows the borrower to make payments before the due date to reduce the amount of interest.
"Prepayment Penalty is"___________________
Requires borrowers to pay a fee if they wish to pay back an entire loan before the due date.
"Wage Assignment is "_____________________
A voluntary deduction from an employees paycheck used to pay off debts.
"Wage Garnishment" is ___________________
An involuntary form of wage assignment often enforced by court order.
A Balloon Payment is "_______________________"
Its the last monthly payments on a loan where there is an increase or higher amount than the previous monthly payments on the same loan.
What are Lending Institutions ?
Give some examples ?
Are businesses that make a profit by charging interest.
Banks, credit unions, Life Insurance Companies
What are the 4 components of the Monthly Payment Formula ?
"M" Monthly Payment
"P" Principal
"r" Interest Rate
"t" Number of years
Define a small Loan taken over a very short period of time usually for a few weeks.
"Payday Loan"
A customer who needs money leaves behind a personal valuable or belonging like a jewelry and this is called "_______"
Collateral
What is the Fair Credit Reporting Act ?
This where the Lender is required to give you a reason or explanation in writing for your loan denial.