Loans & Debt
A percentage of the total amount (principal) borrowed or deposited
What is Interest Rate?
The place where a retail transaction is completed
What is Point of Sale (POS)?
The (APR) annual percentage rate (The annual cost of borrowing money) charge that some credit card companies use for the privilege of using their card
What is Annual Fee?
Similar to a personal loan (A loan for individuals to cover various personal needs), but used for businesses to help with things like starting up.
Hint- NOT Peer-To-Peer Lending (Borrowing money directly from other individuals).
What is Small Business Loan?
The type of loan where the interest rate can change over time.
What is Variable-Rate Loan?
A three-digit number between 300 and 850 that predicts how likely you are to pay back a loan on time and helps reduce down payments (An initial upfront payment) based on your credit history
What is Credit Score?
Benefits offered by credit card (A card that allows the holder to borrow funds to make purchases that you pay later) companies or retailers to encourage spending.
What is Cash Back/Rewards?
A penalty charged when you don’t make at least the minimum payment (The smallest amount you’re required to pay each month to keep your account in good standing) by the due date.
What is Late Payment Fee?
Very short-term loans that you usually have to repay by your next payday. Renters like to use this for late lease payments (Renting something for a set period of time).
What is Payday Loan?
This is someone who is allowed to use a credit card account that belongs to someone else.
A financial arrangement where a lender, a person who provides a sum of money to a borrower, agrees to repay it, usually with interest, over a set period.
What is a Loan?
The maximum amount of money a credit card issuer (someone who lets you borrow money) will allow a cardholder to borrow
What is Credit Limit?
The time frame between the end of your billing cycle and your payment due date.
What is Grace Period?
A loan that is paid back over time with a fixed number (set amount paid back) of regular payments. Similar to a mortgage (a loan specifically for buying real estate, like a house).
Most unsecured debt (A debt that doesn’t require any assets, like a house or car, that the lender can take if you fail to make payments) instead it is repaid by having someone who agrees to take on the responsibility of repaying a loan if the main borrower can’t.
What is Cosigner?
The cost of borrowing money or the reward for lending/saving it in a term (The specific timeframe period of a financial contract)
What is Interest?
A type of debit card (a payment card that deducts money directly from a checking account) that you load with money before you can use it.
What is Prepaid Debit Card?
This is a much higher interest rate that can be applied to your balance if you miss payments.
What is Penalty APR?
A type of credit that allows you to borrow money repeatedly up to a certain limit.
What is Revolving Credit?
This is a loan that is backed by an asset, like a house or car, that the lender can take if you fail to make payments.
What is Secured Debt?
An asset (something you own) that a borrower pledges to a lender to secure a loan. If the borrower defaults (fails to repay the loan), the lender can sell the asset.
A type of credit card (funds you borrow and pay later) that is backed by a cash deposit.
What is Secured Credit Card?
The standardized table required by law that clearly summarizes the key costs of a credit card offer. Then you typically sign a credit card agreement (The legally binding contract between you and the credit card issuer).
What is Schumer Box?
A crucial tool lenders use to compare how much you owe each month in debt payments to your income.
What is Debt-to-Income Ratio?
The process of gradually paying off a debt over time with regular payments. Similar to a fixed-rate loan (The type of loan in which the interest rate stays the same throughout the entire loan period).
What is Amortization?