Chapter 15

Unearned Interest

Interest not earned by the lender under the Rule of 78 for a loan of 12 months.

Stated Interest Rate

It is an interest rate that can differ from the APR. It is also known as Nominal Interest Rate.

Schedule

It shows the amount of each payment that goes to interest and to principal. Another name for an Amortization Table.

Personal Property

Items that can be moved from one location to another such as an automobile, a boat, or a stereo.

Variable-Interest-Rate Loans

Also called Adjustable-Rate Mortgages are popular and are offered by most mortgage lenders.

Total Installment Cost

Also called Deferred Payment Price it is a value that is needed in order to find the annual percentage rate on a loan.

Adjustable-Rate Mortgages

Also called Variable-Interest-Rate Loans Mortgages are popular and are offered by most mortgage lenders.

Repayment Schedule

Also called a Amortization Schedule or a Loan Reduction Schedule it shows the amount of payments for interest, the amount for principal, and the principal balance for each month over the entire life of the loan.

Loan Reduction Schedule

Also called a Repayment Schedule or a Amortization Schedule it shows the amount of payments for interest, the amount for principal, and the principal balance for each month over the entire life of the loan.

Amortization Schedule

Also called a Repayment Schedule or a Loan Reduction Schedule it shows the amount of payments for interest, the amount for principal, and the principal balance for each month over the entire life of the loan.

Federal Truth-in-Lending Act

Also known as Regulation Z, this act makes lenders report their financial charge and their annual percentage rate on installment loans.

Amortization Table

Also known as a Schedule, it shows the amount of each payment that goes to interest and to principal.

Nominal Interest Rate

Also known as the Stated Rate it is an interest rate that can differ from the APR.

Revolving Charge Account

An account that may never be paid off. A minimum amount must still be paid for it each month.

Real Property

Another name for Real Estate. It is buildings, land, and homes which cannot be moved.

Real Estate

Another name for Real Property. It is buildings, land, and homes which cannot be moved.

Sum of the Balances Method

Another name for the Rule of 78. A variation of the United States Rule that is used by many lenders.

Amount Financed

Another value that is needed besides Total Installment Cost to find the annual percentage rate on a loan.

Stafford Loan

A type of installment loan that is used by students.

Average Daily Balance

A value that helps find finance charges if balances aren't paid in full.

Rule of 78

A variation of the United States Rule that is used by many lenders. Also known as Sum of the Balances Method.

Credit Accounts

Accounts opened at certain stores that allow the customer to make frequent purchases without having to pay cash.

Open-End Credit

A common way of buying on credit that has no fixed payments.

Installment Loan

A loan that is paid off in monthly installments.

Annual Percentage Rate

A rate found by multiplying the monthly rate of interest by 12.

Finance Charges

Any charges beyond the cash price of an item.

Credit Cards

Cards that are portable and allow the user to buy things from most stores on credit. Ex: Mastercard, Visa

Over-the-Limit Fees

Charge by lenders in the event the debt of the credit user exceeds the amount authorized by the issuer of the card.

Late Fees

Charged by lenders for payments that are recieved after the due date.

Fixed-Rate Loans

Home loans with fixed, stated interest rates.

Accelerated Morgages

Mortgages that result in significantly less interest over the life of the loan.

Country Club Billing

Provides a carbon copy of all original charge reciepts. Is more expensive for credit card companies than Itemized Billing.

Itemized Billing

Provides an itemized listing of all charges without copies of each individual charge. Is cheaper for credit card companies than Country Club Billing.

Credit Limit

The maximum amount of credit that can be charged to a card.

United States Rule

The method for calculating the effect of an early loan payment used by the U.S. government.

Amortized

This is what happens to a loan if both principal and interest are paid off by a sequence of periodic payments.

Consolidate Their Loans

This is what many individuals do with high-interest revolving account loans sometimes.

Repossessed

What happens to someones property when someone cannot afford their debt.

Impound Account

What lenders require for people to take out a mortgage. Another name for Escrow Account.

Escrow Account

What lenders require for people to take out a mortgage. Another name for Impound Account.

Loan Repayment Tables

Yet another name for a Schedule or an Amortization Table. It shows the amount of each payment that goes to interest and to principal.