Loan, Basic
This is a person who applies for a loan together with the primary borrower.
Co - borrower
The process of checking and estimating the value of something, like a house, car, or property.
Appraisal
The fixed amount you pay every month to repay a loan. It includes both the principal (the money you borrowed) and the interest.
Monthly Amortization
The final payment date of a loan or other financial instrument, at which point the principal (and all remaining interest) is due to be paid.
Maturity Date
A claim, liability, or legal restriction on a property or asset that can affect its use or transfer.
Encumbrance
The term refers to ending something earlier than originally planned or agreed upon.
Pre-terminate/Pay-off
The portion of a loan at a certain point in time that has not yet been remitted to the lender.
Outstanding Balance
A legal and binding contract signed between the lender and the borrower which states that the borrower will repay the loan as agreed upon in the terms of the contract
Promissory Note
Paying only part of the total amount you owe, not the full amount.
Partial payment
The fixed amount you pay every month to repay a loan. It includes both the principal (the money you borrowed) and the interest.
Monthly Amortization
What document is needed to authorize a person to legally act on behalf of another person or entity?
Special Power of Attorney
A document you need to request in paying off the loan.
Statement of Acocunt
Explain the difference between a secured loan and an unsecured loan, and give an example of each.
Secured loan: W/ Collateral (Home Loan/Auto Loan)
Unsecured loan:W/o Collateral (Personal Loan/Salary Loan)
What is Collateral?
Collateral refers to assets or property a borrower offers to a lender as security for a loan. It's essentially a promise: if the borrower can't repay, the lender has the right to take the collateral to recover the funds.
What is Insurance?
Insurance is a way to protect yourself financially. You pay a small amount regularly (called a premium) to an insurance company, and in return, they help cover costs if something bad happens like an accident, illness, or damage to property.