Glossary of Personal Finance Chapter 10
Created by sregione
- Cars, boats, motorcycles, etc
- What types of items are personal loans typically used for?
- Down Payment
- What is the fraction of an items cost that a consumer pays up front when taking out a personal loan?
- 24 to 72 months.
- When do personal loans typically mature?
- What may a creditor sometimes ask for when you sign loan documents if you don't have good established credit? This person promises to repay the loan if the borrower defaults.
- Annual Percentage Rate
- By law the lenders are required to report the interest rate that factors in all of the relevant loan charges. This interest rate is known as _______ ?
- Secured Loan
- What type of loan has some asset pledged against it as collateral?
- What types of loans are typically taken out to purchase a house?
- Home Equity Loan
- What type of loans allow home owners to take borrow money using the equity in their house as collateral?
- Federal Perkins Loan
- What type of loan carry's very low interest rates and have longer grace periods and are typically used for students with exceptional financial needs?
- 1. Fill out Application
2. List your sources of income
3. Provide income statement and balance sheet.
4. Lender will access credit score
5. Lender will make a decision
6. Co-signer might be required
- What is the process of taking out a personal loan?
- Collateral are item(s) of value that you agree to surrender to the lender if you fail to pay your loan as agreed.
- Explain how collateral works.
- 1. down payment
2. mortgage origination fees
3. appraisal fees
4. home inspection fees
5. filing fees
6. mortgage interest
- What are some of the costs of buying a home?
- Adjustable Rate Mortgage
- What type of mortgage a mortgage has a rate of interest that adjusts to reflect market conditions.
- Annual Percentage Rate (APR)
- What describes the interest rate for a whole year, rather than just a monthly fee/rate as applied on a loan.
- What do you call something that is pledged as security for repayment of a loan and will be forfeited in the event of a default.
- What do you call it when you fail to repay your loan as agreed.
- Federal Stafford Loan
- What is a federally guaranteed loan program that allows students to borrow funds from lenders.
- Fixed Rate Mortgage
- What do you call a mortgage that is a fully amortizing mortgage loan where the interest rate on the note remains the same through the term of the loan.
- What is a long term rental agreement.
- Liability Coverage
- What type of insurance coverage provides compensation for harm or wrong to a third party for which an insured is legally obligated to pay.
- Line of Credit
- What do you call an amount of credit that is extended to a homeowner for continued use?
- Maturity Date
- What do you call the date on which an obligation must be repaid.
- Personal Loan
- What do you call a loan that establishes consumer credit that is granted for personal use, usually unsecured.
- Policy Rider
- What is a provision that may be added to an insurance policy, at an additional cost.
- Subprime Mortgage
- What do you call higher interest rate mortgages made to people with poor credit scores?
- Teaser Rate
- What do you call an interest rate charged to a customer during the initial stages of the loan.
- Unsecured Loan
- What do you call a loan that does not require the borrower to put down any type of collateral?
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