Loans and debt
This financial arrangement involves receiving a sum of money from a lender that must be paid back over time, typically with added interest.
What is a loan
This thin plastic or metal card allows the holder to borrow funds up to a pre-approved limit to pay for goods and services, provided the balance is paid back within a specific grace period to avoid interest.
What is a credit card
This popular credit card incentive returns a small percentage of the amount spent on purchases to the cardholder, often in the form of statement credits, checks, or gift cards.
What are Cash Back (or Rewards)
This specific type of loan is used to purchase or maintain a home, land, or other types of real estate, where the property itself serves as collateral.
what is mortgage
This process involves paying off a debt over time through a fixed repayment schedule, where each payment is split between the interest and the principal until the balance reaches zero.
What is amortization
In the world of lending and investment, this term refers to the original sum of money borrowed or put into an asset, separate from any interest or earnings.
What is principal
Unlike its "credit" counterpart, this payment card deducts funds directly from a cardholder's checking account to pay for a purchase.
what is debit card
This measurement represents the total yearly cost of borrowing money, including both the interest rate and any additional fees, expressed as a single percentage.
what is Annual Percentage Rate
Unlike a purchase, this is a legal contract that allows a person to use an asset—such as an apartment or a car—for a specific period of time in exchange for regular payments, without taking ownership.
what is Lease-A lease
This type of borrowing features an interest rate that remains the same for the entire life of the loan, ensuring that the borrower's monthly principal and interest payments never change.
what is Fixed-Rate Loan
This is the "cost of borrowing" or the "reward for saving," expressed as a percentage of the principal amount over a specific period of time.
What is interest
Often used to build or repair credit, this specific type of card requires the user to provide a cash deposit that typically serves as the account's credit limit.
What is a secured credit card
This is a fixed, yearly charge automatically billed to a cardholder's account by some credit card issuers simply for the privilege of keeping the account open.
what is Annual Fee
Typically unsecured and ranging from a few thousand to tens of thousands of dollars, this type of debt can be used for various private expenses like debt consolidation or home repairs.
what is Personal Loan
This type of borrowing features an interest rate that remains the same for the entire life of the loan, ensuring that the borrower's monthly principal and interest payments never change.
What is a fixed-rate loan
This is the initial upfront portion of the total purchase price of an expensive item, such as a car or a home, paid in cash at the time of the transaction.
What is a down payment
This is the maximum amount of money a lender allows a consumer to borrow on a specific card or line of credit at any given time.
What is a credit limit
This is the smallest amount of money a cardholder is contractually required to pay on their credit card balance each month to avoid late fees and keep the account in good standing.
what is Minimum Payment
This is a short-term, high-interest debt, usually for a small amount, that is designed to be repaid in a single lump sum when the borrower receives their next cycle of wages.
what is payday loan
Often tied to an index like the Prime Rate, this type of debt features an interest rate that can change over time, meaning the borrower's monthly payments may increase or decrease based on market conditions.
What is a variable-rate loan
Ranging typically from 300 to 850, this three-digit number represents a borrower's creditworthiness and is used by lenders to determine the risk of lending money.
What is a credit score
Often abbreviated as POS, this is the specific time and location where a retail transaction is completed and the customer makes a payment to the merchant.
What is a point of sale
Required by law to be easy to read, this standardized table found in credit card agreements clearly lists the APR, fees, and other critical terms of the account.
what is Schumer Box
Unlike a one-time installment loan, this type of credit account allows you to borrow, repay, and borrow again up to a set limit as long as the account remains open.
What is revolving credit
This type of debt is granted based solely on the borrower's creditworthiness and promise to pay, rather than being backed by an asset like a house or a car that the lender can seize if payments stop.
what is Unsecured Debt