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A small loan taken over a very short period of time, usually a few weeks or less, requiring the borrower to pay back the loan in full on an upcoming payday mutually agreed upon by the borrower and lender.
payday loan
The difference between the maximum amount allowed and the actual amount owed on a credit card.
available credit
The date that a credit card statement was written.
billing date
The penalty charged for late payments in a credit transaction.
late charge
Organization or person who uses credit.
debtor
The total amount received by the creditor that is applied to an account.
payments/credits
Accumulated interest that will be added to the loan when the repayment period begins.
interest capitalization
A person’s property or what is owned.
asset
Organizations that extend loans, making their profit by charging interest; include banks, savings and loans, credit unions, consumer finance companies, life insurance companies, and pawnshops.
lending institution
A score that summarizes the probability that a debtor will pay a debt and is a reliable way that creditors judge creditworthiness.
FICO Score
Security, such as a personal belonging, car or boat title, CD, or stock certificates, that insures a loan will be repaid.
collateral
The upfront money applied to a purchase that is made using a loan (credit).
down payment
Describes the action when interest builds up or adds to the principal.
accrues
The APR divided by 12; the rate of interest charged each month.
monthly periodic rate
The law that prohibits the creditor from harassing or using unfair means to collect the amount owed.
Fair Debt Collection Practices Act
An online tool used to calculate information about the balance over the lifetime of the loan and on a monthly or yearly basis.
monthly payment calculators
The amount of tuition a family is expected to personally cover based on financial information information submitted to a student loan agency.
expected family contruibution
An involuntary form of wage assignment, often done by court order.
wage garnishment
Describes the situation when a borrower fails to make payments according to the schedule set up when the loan originated.
default
A student loan that is not need based. Students are expected to pay the interest that accrues from the time the money is received.
The form on which a loan applicant must supply personal and financial data that will assist in the loan decision-making process.
fafsa
A report sent to a family after its Free Application for Federal Student Aid is processed, includes information about which student loans are available.
student aid report
An agreement that states the conditions of a loan; a borrower’s signature confirms a promise to pay back the loan as outlined in the agreement.
promissory note
A law that offers protection if a credit card is lost or stolen; if a consumer contacts the credit card company immediately after losing a credit card or the card is stolen, the maximum liability is $50.
truth-in-lending act
Requires the borrower to make periodic payments but no interest is charged if the payments are made on time. With this type of payment plan, borrowers pay the same price for an item as if they paid for it in full at the time of purchase, and they take possession of the item immediately.
deferred payment plan