Consumer Ed Ch.10 Final Review
policy rider
Additional insurance coverage to cover things such as jewelry or valuable heirlooms that are often not fully covered by a typical insurance policy.
Home equity loan
Allows a homeowner to borrow against the equity in his or her home- that is, the difference between the home's value and the amount owed to a lender.
Collateral
Assets that have been pledged against a loan repayment
Down Payment
The initial upfront portion of the total amount due on a purchase.
Annual Percentage Rate (APR)
The interest rate that shows what a borrower is actually paying with all the costs of financing factored in.
Grace Period
Time in which credit card companies do not charge interest on purchases. Typical grace periods are 20 days from the time the statement is "closed," or the bill is calculated and sent.
Fixed rate mortgage
What form of mortgage does the interest rate never change?
Adjustable rate mortgage
What form of mortgage does the rate fluctuate
Date at which a loan should be completely repaid
What is a maturity date?
They stop making payments
When someone defaults on a loan that means what?
Overdraft Protection
A feature that allows a person to "over-draw," or exceed the credit limit. 307
Payday Lending
A lender provides cash advances at a high cost to customers who provide a check dated for some time in the future.
Unsecured Loan
A loan in which there is no collateral pledged
Personal Loan
A loan that is not backed by collateral. Also known as an unsecured loan, it is based solely upon the borrower's credit rating.
Lease
A long-term rental agreement
Cosigner
A person, other than the principle borrower, who signs for a loan and assumes equal liability for it.
A extremely low rate to draw people in
A teaser rate is an what?
Debt consolidaion
Combining several small accounts into one larger account that may be able to be financed at a lower rate.
Liability coverage
Coverage that covers damage you do to other peoples property is called
Secured loan
Has an asset pledged against the loan. The lender is assured of ending up with some valuable asset if the borrower fails to pay off the loan.
Subprime mortgage
Higher interest rate mortgage loans made to people with poor credit scored are called what?
Pawnbroker
Holds items in exchange for loans that run for 30 days to as much as three months.
24-72 Months
How long do loans usually last?
Credit Card
Provides individuals with revolving open-end credit, which they can draw from repeatedly up to some preset limit.
Mortgage
The common term for the type of loan people take to purchase a home.
