Installment VS Revolving
Borrowing from a financial institution in order to purchase a vehicle.
What is a auto loan?
Risk of default is low, so interest rates tend to be lower.
What is a secured debt?
Rate remains constant during the life of loan.
What is a fixed rate?
Borrowing from a financial institution in order to purchase a home.
What is a Mortgage?
No collateral needed. Borrowers are approved based on credit worthiness.
What is a unsecured debt?
Rates fluctuate periodically.
What is a variable rate?
A plastic card issued by a financial institution used for purchases that you need to pay back.
What is a credit card?
Something pledged as security for repayment of a loan, to be forfeited in the event of default.
What is Collateral?
This rate is applied to loans and refers to borrowing. The interest you pay on top of your loan amount.
What is the Annual Percentage Rate? (APR)
Money borrowed from a financial institution in order to pay for college.
What is a student loan?
Mortgages, Auto Loans, Secured Credit Cards.
What are examples of Secured Debt?
This rate applies to savings account. Free money you earn for keeping your funds in a savings.
What is the Annual Percentage Yield? (APY)
A line of credit used to cover insufficient funds.
What is a overdraft line of credit?
Traditional Credit Cards, Student Loans, Personal Loans.
What are examples of Unsecured Debt?
It is recommended that you pay more than the _____ to avoid excess interest on your credit card bill.
What is Minimum Payment?