PF Unit 4 Vocab Review
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28 terms
Terms | Definitions |
|---|---|
 Credit | someone willing to lend you money |
| Principle | The amount borrowed. This must be repaid. |
| Interest | the amount you pay to use someone else's money |
| Credit Card | Allows a person to make purchases at many different stores and pay for them later |
| Installment Loan | Loan with fixed payments, rate of interest, and length of term |
| Student Loan | Loan used for tuition and other college expenses. |
| Mortgage Loan | This is a loan a person would obtain with which he intends to buy a home. |
| Annual Percentage Rate | Rate that shows how much credit costs you on a yearly basis, expressed as a percentage |
| Annual Fee | The yearly fee paid to the credit card company for the privilege of using a card |
| Credit Limit | The maximum amount of credit a lender will extend to a customer |
| Finance Charge | A fee for borrowing money, added to a monthly credit card bill. |
| Origination Fee | A fee charged to a borrower to cover the costs of initiating the loan |
| Loan term | The length of time you have to pay off a loan. |
| Grace Period | A time period during which no finance charges will be added to your account |
| Over The Limit Fee | A fee for spending more than your credit limit |
| Late Fee | A penalty for making a payment after the due date |
| Universal Default | A clause included in many credit card company agreements that allows a credit card company to increase your interest rate if you make just one late payment. |
| Debt | Something that is owed, such as money |
| Collateral | This is an asset of value that lenders can take from you if you don't repay the loan as promised. |
| Capital | Lenders take comfort in knowing that you have personal items of value. |
| Capacity | Lenders chief concern is whether you are able to repay a loan. |
| Character | Lenders want to know if you're trustworthy. |
| Credit Report | A report of an individual's credit history prepared by a credit bureau and used by a lender in determining a loan applicant's creditworthiness. |
| Credit History | A record of an individual's repayment of debt. |
| Credit Score | A number that reflects your creditworthiness, based on the 4 C's of Credit. |
| Bankruptcy | When an individual or business has debts that are greater than their assets and cannot be paid, they are in a state of? |
| Truth in Lending Act | An act which requires lenders to inform borrowers of all direct, indirect and true costs of credit. |
| Fair Debt Collection Practices Act | Federal legislation that was passed to protect consumers from inappropriate collection activities such as harassment or deception. |
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