Credit Basics
Rent To Own
A person rents the item with the condition that if the renter completes the rent then they will own the item. Sentence: You pay more when you rent to own than when you just pay up front.
Payday Loan
Definition: A short term loan that immediately withdrawals from the borrower's account on the day they get paid. Sentence: I wouldn't get a payday loan because they withdrawal money from your paycheck.
Refund Anticipation Loan
Definition: A short term loan that is given back to the lender from the borrower's anticipated tax refund. Sentence: Refund anticipation loans are good because they're not coming from money you need.
Open ended credit
Definition: Extended line of credit established in advance. Sentence: I can pay my credit card off open ended.
Closed end credit
Definition: Loan which the borrower must repay the amount in a specified number of equal payments. Sentence: The payments made on the house are closed ended.
Alternative Credit
Definition: Short term loan that provides immediate cash by securing a borrower's written check or a withdrawal form. Sentence: I got alternative credit when I needed a short term loan.
Pawn Loan
Definition: The borrower gives a person an item for a loan and they make payments on it so they can get their item back. Sentence: On pawn stars they ask if you want to have a pawn loan on your item or sell it.
Title Loan
Definition: The borrower gives a person an title of an item for a loan and they make payments on it so they can get their title back. Sentence: There are lots of stores that give title loans where you can still keep your item while you're paying off the loan.
