Loans

Home-Equity Loan

A consumer loan extended to a homeowner that uses the borrower's home as collateral

Lease

A contract (often used for cars or property) by which one party gives property to another for a specified time, usually in return for a periodic payment

Direct Plus Loans

A federal loan available to graduate or professional students and eligible parents of dependent undergraduate students to help pay for the cost of the student's education at participating schools

Late Payment Fee

A fee charged if your payment is received after the due date

Home Equity Line Of Credit (HELOC)

A line of credit extended to a homeowner that uses the borrower's home as collateral

Mortgage

A loan by individuals and businesses to make real estate purchases without paying the entire value of the purchase up front

Variable-Rate Loan

A loan in which the interest rate can change, based on prime rate or index rate, over the course of the loan

Fixed-Rate Loan

A loan in which the interest rate is determined before loan is granted and remains constant as long as ontime payments are being made

Consolidation Loan

A loan that combines two or more education loans into a single loan, allowing the borrower to make a single monthly payment

Peer-To-Peer Lending

A method of debt financing that enables individuals to borrow and lend money without the use of a financial institution as an intermediary

Adjustable-Rate Mortgage (ARM)

A mortgage in which the initial interest rate is normally fixed for a specified period of time after which it is reset periodically, often every month

Fixed-Rate Mortgage

A mortgage that has a fixed interest rate for the entire term of the loan as long as ontime payments are being made

Down Payment

A partial payment made in cash at the beginning of the purchase of a good or service, while the remaining balance is due later or is financed as part of a loan

Direct Subsidized Loan

A student loan that the federal government pays interest on as long as the student is in school at least half-time

Direct Unsubsidized Loan

A student loan where the student is responsible for the interest during the time they are in school, which means they must pay that interest while studying or have it rolled into their loan

Loan

An agreement where you are credited with a fixed amount of money for a fixed period of time, usually with interest

Unsecured Debt

Debt not tied to a specific asset, making it difficult or impossible for the lender to repossess items if payments are not made

Secured Debt

Debt tied to a specific tangible asset that can be used as collateral and reposed if payments are not made

Installment Loan

Loan used to finance a specific purchase for a specific amount of time, during which regular payments pay the accrued interest and a portion of the principal

Principal

Original amount of money borrowed, separate from interest or fees

Co-Signer

Someone who legally agrees to take responsibility for a person's debt if they cannot repay it

Collateral

Something valuable that the lender can take as payment if you can't or don't repay your secured loan

Term

The amount of time you have to repay your entire loan

Interest

The amount you owe as the cost of borrowing money

Amortization

The paying off of debt with a fixed repayment schedule in regular installments over a period of time

Interest Rate

The rate charged for borrowing money usually expressed as a percent of the amount borrowed

Home Equity

The value of ownership built up in a home or property that represents the current market value of the house minus any remaining mortgage payments