A stipulation in a loan contract stating that the entire balance becomes due immediately if other contract conditions are not met.
Liquidation of a debt by making periodic payments over a set period, at the end of which the balance is zero.
A series of equal payments made at regular intervals, with interest compounded at a specified rate.
The deduction from a checking or savings account of funds that are automatically transferred to a creditor each month. Some lenders offer interest rate discounts if loan payments are set up on auto debit at the beginning of the loan.
A financial statement showing a "snapshot" of the assets, liabilities and net worth of an individual or organization on a given date.
A legal proceeding declaring that an individual is unable to pay debts. Chapters 7 and 13 of the federal bankruptcy code govern personal bankruptcy.
Certificate of Deposit (CD)
A type of savings account that earns a fixed interest rate over a specified period of time.
A kind of ownership in a corporation that entitles the investor to share any profits remaining after all other obligations have been met.
The granting of money or something else of value in exchange for a promise of future repayment.
A plastic card from a financial services company that allows cardholders to buy goods and services on credit.
A loan and bill payment history, kept by a credit reporting company and used by financial institutions and other potential creditors to determine the likelihood a future debt will be repaid.
Credit Reporting Company
An organization that compiles credit information on individuals and businesses and makes it available for a fee.
A number generated by a statistical model that objectively predicts the likelihood that a debt will be repaid on time.
A plastic card similar to a credit card that allows money to be withdrawn or the cost of purchases paid directly from the holder's bank account.
The amount of loss paid by an insurance policyholder. The deductible may be expressed as a specified dollar amount or a percent of the claim amount.
Fair Market Value
The price a willing buyer will pay and a willing seller will accept for real or personal property.
Federal Deposit Insurance Corp.
(FDIC) A federally chartered corporation that insures bank deposits up to $100,000.
The fee a lender charges to originate a loan. The fee is based on a percentage of the loan amount; one point is equivalent to 1 percent.
The legal process used to force the payment of debt secured by collateral whereby the property is sold to satisfy the debt.
A tax-deferred investment and savings plan that serves as a personal retirement fund for employees.
Health Savings Account
A tax-advantaged personal savings account, set up to be used exclusively for medical expenses; must be paired with a high-deductible health insurance policy
Individual Retirement Accunt (IRA)
A retirement plan, offered by banks, brokerage firms, mutual funds and insurance companies, to which individuals can contribute each year on a tax-deferred basis.
The amount of money required for coverage under a specific insurance policy for a given period of time. Depending on the policy agreement, the premium may be paid monthly, quarterly, semiannually or annually.
A fee for the use of money over time. It is an expense to the borrower and revenue to the lender. Also, money earned on a savings account
The percentage charged for a loan, usually a percentage of the amount lent. Also, the percentage paid on a savings account.
A creditor's claim against a property, which may entitle the creditor to seize the property if a debt is not repaid.
A temporary and conditional pledge of property to a creditor as security for the repayment of a debt.
A bond issued by cities, counties, states and local governmental agencies to finance public projects, such as construction of bridges, schools and highways.
The nominal, or face, value of a stock or bond, expressed as a specific amount on the security.
Targeting loans to seniors, low-income and other people to take advantage of their financial status or lack of financial knowledge.
The right to buy or sell a corporation's stock at a predetermined price or calculable formula; sometimes used as part of employee compensation.
A person who owns stock in a company and is eligible to share in profits and losses; same as shareholder.
Phrase referring to money that is not subject to income tax until it is withdrawn from an account, such as an individual retirement account or a 401(k) account.
A government security with a term of more than 10 years; interest is paid semiannually.