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If you're really that desperate or short on time, copy and paste this!
(make some changes obviously, ex: list them alphabetically, move the chunks around from going 162, 172, 178, and 189 to 189, 178, 172, 162, or something else that would mkae it less obvious that you copied from here like changing the formatting by replacing the ":" with a "=")
Lenders: Those that advance money to others, with the expectation of being repaid with interest. Banks are the most common lenders for individuals.
Principal: The original value of a loan or deposit/investment, to which interest or returns may be added.
Annual Percentage Rate (APR): The percentage cost of credit on a yearly basis. The interest rate on a loan is expressed as an annual percentage.
Prime Rate: The interest rate banks charge their best customers, usually corporations rather than individuals; this is often used as a reference point for personal loan rates.
Finance Charge: The cost of credit (in dollars) that is charged by the lender; both interest owed on a loan or a credit card, and also any fees on the loan.
Installment Loans: A one-time advance of a sum of money that the borrower agrees to return through regular payments over a predetermined length of time (called the term). Examples include mortgages, car loans, and student loans.
Revolving Credit: Credit that offers a credit limit, instead of a set loan amount, where the borrower can spend up to that limit at any one time. Also called open-end credit.
Closed-end credit: A one-time advance of a sum of money that the borrower agrees to pay back over a predetermined length of time (called a term). Examples of this type of loan include mortgages, car loans, and student loans.
Amortization: The reduction of a debt over time. An amortization table is used by lenders to show how payments are applied (part to pay interest and part to pay principal) over the loan term, and how that leads to paying off the loan.
Open-end Credit: An account that offers a credit limit instead of a set loan amount. The borrower can spend any amount up to that limit at any one time. Credit cards are a form of open-end credit, also called revolving credit.
Minimum Payment: The lowest amount of money one can pay on a credit card bill or other line of credit to avoid delinquency and late fees. Usually a minimum payment equals 2% to 5% of the balance owed, or a set amount like $25.
Balance: On a credit card account, the outstanding debt left on that card past the first billing period, when interest will start to accrue. In a bank account, the amount of money in that account at any point in time.
Promissory Note: A contract with a lender (of a student loan, for example), stating that the borrower will repay the loan amount.
Delinquent: When an individual misses a scheduled loan payment, the loan is considered delinquent. At that point, the lender will probably start charging late fees.
Forbearance: A relaxed payment schedule on a loan that the borrower asks for during a time of financial hardship. During the forbearance period, interest may still accrue and be added onto the loan as a lump sum when the period is up.
Default: When the borrower has not abided by the loan terms, by not paying or not being able to pay. Also in bonds, when a bond issuer is unable to pay back the original principal because they have no money to pay.
Collection Agency: A company that tracks down delinquent debt in exchange for a commission from the credit card company or bank.
Repossession: Taking back a good or property due to the failure of the purchaser (or borrower) to make required payments.
Foreclosure: Repossession of a house by the mortgage company that owns it, when the homeowner can no longer make mortgage payments (they default on their loan).
Bankruptcy: A last resort for a debtor. The person declares in court the inability to pay his or her debts, in order to be freed from debt. First, by law, the individual would have to go through a credit counseling program and submit to a repayment plan.
Capacity: What a lender determines is a borrower’s ability to take on a loan. The lender may want to see proof of income, assets, and other debt (for example, pay stubs and account statements) to assess whether they have the capacity to make loan payments.
Secured Loan: A loan in which the borrower pledges something of value in case the loan is not repaid.
Collateral: Money or items of value used to back up a loan, to be seized if the borrower defaults.
Credit Report: A document that chronicles an individual’s borrowing over the past several years. A report shows every loan or credit line taken out over a certain period by the individual, as well as payment history on those loans.
Credit Reporting Agencies (or bureaus): Companies that prepare credit reports on individuals that lenders and other service agents (such as insurance companies) can use to assess an individual’s ability to handle credit. The three major agencies are TransUnion, Experian, and Equifax.
Joint Account: A bank account where two individuals share responsibility and access to the account.
Tax Liens: Claims by a state or federal government on something a person owns, in order to secure money for unpaid taxes.
Fair Isaac Corporation (FICO): The company that turns the information in people’s credit reports into a numerical assessment of creditworthiness called a FICO credit score.
Credit Score: The information in a person’s credit reports is turned into a numerical assessment of creditworthiness, known as a FICO credit score, which is provided to interested lenders. Lenders use these scores to determine who should get loans and at what rates.
Subprime: Risky credit borrowers with under “prime” credit scores, typically those with credit scores 620 and below. These borrowers are considered at high risk of defaulting on their loans, and often will either be denied credit or assessed at the highest interest rates.
Average Daily Balance: A calculation that the credit card company uses to bill finance charges. With this method, the card company averages the balance on the card from each day of the month. Finance charges are based on this average balance.
Grace Period: The time between the credit card bill’s statement date and the due date, in which one can pay off purchases made during the period before any finance charges accrue.
Penalty APR: The rate charged on a credit card if an individual violates the terms of their credit card agreement. Often it is paying the bill late, or going over the credit limit, that triggers this rate.
Cash Advance: Money withdrawn directly from an ATM as a loan against a credit card account.
Balance Transfer: Taking the balance from a credit card and moving it to a different card account. Usually done to reduce interest charges, often by taking advantage of a special offer.
Authorized User: A person issued a credit or debit card with their name on it, where that person is not the one in charge of paying the bill. They are authorized by the account holder to use the account.
Rewards Cards: Many credit card companies offer rewards programs through which the cardholder can earn airline miles, points, or money back on each dollar spent on the card.
Financial Aid: Ways of paying college tuition that come as help from outside sources such as governments or banks. Financial aid can include grants, scholarships, work-study, and loans.
Grants: Money from the government, corporations, or a university, given to those with extra financial need for tuition costs. Like scholarships, grants do not require repayment as loans do.
Scholarships: Money for education given to a student based on criteria such as academic ability or athletic skill.
Work-study: A job given to a student by or through a university or college, that pays wages through government resources. This is another form of financial aid.
Free Application for Federal Student Aid (FAFSA): Getting financial aid begins with filing the FAFSA. This government form directs the calculation of a student’s eligibility for grants, work-study, and government loans.
Perkins Loan: The least expensive government student loan offered to students with extra financial need.
Subsidized Student Loans: Student loans that do not accrue interest until after graduation.
Stafford Loan: A government loan for students, fixed at a low interest rate. Any student is eligible for unsubsidized Stafford Loans. This is the best available loan for many students.
Unsubsidized Student Loans: Student loans that accrue interest from the moment they are taken out.
PLUS Loan: The Parent Loan for Undergraduate Students, a special loan for college students where their parents must cosign the loan.
Private Student Loans: These are issued by banks to help pay college costs. They are not regulated by the government. There are no limits on how much one can borrow, but these loans also typically come with high interest rates.
Refinance: To trade in a loan for one with different terms, usually something done with mortgages. There are often fees associated with doing this.
Closing Costs: Costs that home buyers must budget for when getting a mortgage; for one-time expenses like attorney fees and credit check fees incurred when finalizing the purchase of the house.
Lease: A contract between a tenant and a landlord, stating the period of time the tenant will live in the apartment, monthly rent amount, and the responsibilities of the landlord and the tenant in maintaining the property.
Security Deposit: A sum of money given to the landlord upon leasing an apartment, to guarantee against any damage to the apartment or delinquency in paying the rent.
Rent-to-own: An installment loan in which the item itself is being loaned and the interest is built into the price of eventual purchase.
In-store Financing: Loans made by retail companies when they let an individual take an item home and pay for it over time. These loans often come with high APRs and hidden fees.
Payday Loans: Cash loans for people who need money before their next paycheck. These are short-term loans—usually two weeks—written up to the amount of the coming paycheck.
Overdraft Protection: The bank agrees it will pay when charges are overdrawn on the account; but a nonsufficient funds fee will usually be charged.
Line of Credit: A form of revolving debt, like a credit account, linked to a checking or savings account. It often comes with yearly maintenance fees and a high APR.
Pawnshops: Places to pawn, or bring in, a valuable item—such as jewelry, a musical instrument, a camera, or a computer—in hopes that the pawnbroker will make a short-term loan up to the value of the item, in trade for holding that item as collateral and charging interest. (These are loans typically under $1,000 dollars.)
Pawnbroker: Someone who runs a pawnshop.
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