Personal Finance quiz #2

loans

borrowing a specific amount for a certain period of time

what are common loans

college, house, car, renovations

interest

cost of borrowing money

what is the difference between a debit card and a credit card?

debit card comes right from your checking account and a credit card you pay back later

single payment loan

debtor pays back loan in one payment

principal

The amount of money borrowed

Secured and Unsecured Loans

The first types of loans are loans that are protected by collateral

Cash advance

is a withdrawal from cash from your credit card account

revolving account

is an account in which only part of the balance needs to be paid during the monthly paid period

creditor

leander

Grace Period

A time period during which no finance charges will be added to your account

sources of loans

banks, credit unions, saving and finance companies, sale and finance companies, consumer and finance companies, life insurance companies, friends/fammily

APR

a cost of a loan to a borrower

Credit

an agreement to obtain money, goods or services in exchange to promise to pay back later

finance charge

any fee representing the cost of credit, or the cost of borrowing

credit cards

bank credit cards, gas credit cards, store credit cards

debtor

borrower

collateral

property that backs you up if a person cant pay

Charge cards

require you to pay the full balance every month

installment loans

the debtor pays back the loans in monthly installments

commercial credit

when businesses borrow money

Consumer Credit

when people borrow money

capacity

your ability to pay back a loan

character

your willingness to pay back a loan